What can we learn from the latest FCA complaints data?

ThoughtLast week (17 October), the Financial Conduct Authority released its latest complaints data. The data always gives a good insight into the issues firms are pulled up about, and has lessons for any firm wanting to improve its own approach to compliance.

Here, we take a look at the new data and what it reveals.

What complaints data does the FCA publish?

The regulator releases complaints statistics twice a year, in May and October, showing the number of complaints that have been received by the firms it regulates. The previous data, released in May this year, showed that complaints were at their lowest level for three years.

Data can be searched by firm name on the regulator’s website; it’s also shared in aggregate.

What does the latest data say?

The data showed that:

  • The number of complaints increased from 3.91m in the second half (H2) of 2018 to 4.29m for the first half (H1) of 2019.
  • This increase was largely due to a jump in Payment Protection Insurance (PPI) complaints, from 1.58m to 2.12m between H2 2018 and H1 2019, in advance of the August submission deadline.
  • 49% of the complaints received during H1 2019 related to PPI.
  • Excluding PPI, complaints to the regulator were down in the last six months; from 2.32m to 2.18m. This is the lowest volume of complaints since new reporting rules came into effect in 2016.
  • The most complained about products remain PPI, current accounts, credit cards and motor and transport insurance.

The firm-specific data includes data from individual firms that have reported 500 or more complaints in a six-month period, or 1,000 or more in a year.

These total approximately 290 firms, and account for around 98% of all complaints that firms report to the regulator. It’s clear that a relatively small number of firms – around 10% of the 3000 that submit data to the FCA -- makes up the majority of complaints – whether due to their size and prominence in the market, or repeated failings.

The complaints information published by the FCA includes data on:

  • the number of opened, closed and upheld complaints, in relation to the size of the market or firm
  • the amount of redress paid
  • the type of firm the complaint was about
  • the type of product the complaint was about
  • the reason for the complaint

It does not yet include data on firms that are only authorised to carry out consumer credit-related activities, because not all firms have submitted the data yet to the FCA following their authorisation process.

Make sure you don’t appear in the FCA’s complaints data

If you want to avoid appearing among future complaints data, it’s worth reminding yourself of the regulator’s full definition of a complaint, which appears in its Handbook glossary.

The Handbook also defines an eligible complainant; firms must report all complaints made by eligible complainants.

There are also some steps you can take to help reduce your likelihood of compliance breaches and customer complaints:

  1. Make fair promises and ensure your products and services deliver on them. Ensure you convert your client care promises into action.
  2. Remind yourself of the FCA’s financial promotion rules – what is a financial promotion and what do you need to do to ensure yours comply?
  3. When it comes to advertising compliance, it’s not only the financial regulator you need to consider. The ASA and CAP govern all UK advertising; you also need to meet their requirements.
  4. Brush up on rules around treating customers fairly – our TCF FAQs will help.
  5. Ensure that your promotions can’t be considered misleading.
  6. And make sure that they, and any advice your firm gives, meet FCA standards on suitability – particularly important when dealing with vulnerable clients.
  7. Manage the risks inherent in your social media strategy to ensure a compliant approach to Twitter, Linkedin and any other social media platforms you use.
  8. Ensure that your processes around Compliance team review and approval are robust, so nothing unapproved slips through the net – maybe consider whether automation or innovation and regulatory technology can help here.

Make sure your financial promotions meet the grade

Producing fair, clear and compliant financial promotions is a key step in meeting customers’ – and the regulator’s – expectations.

Our Financial Promotions Checklist for Compliance teams can help here. There are five key stages to producing financial promotions, during which the process and documented approvals can be as important as the end result.

Read more, and make sure your financial promotions process is compliant, by downloading a free copy of the checklist from our resource library.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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