• Robert Bell

FCA – Complaints Data Publication

The FCA published their H2 2020 complaints data at the end of April. The aggregate data shows that the number of complaints has decreased significantly from H2 2019 – the 2.19m complaints received in H2 2020 represents a 26% decrease in complaints, and the number of complaints received is the lowest recorded since H2 2016.


However, this decrease is due to a significant drop off in the number of PPI complaints, which saw a 77% decrease within the year 2020 alone. When other types of complaints are analysed and PPI is excluded, there was an increase of 3.3% in H2 2020 when compared to H1 2020.


FCA – Complaints Data Publication

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Treating Customers Fairly Course

The data as it currently stands does not include complaints against firms that are only authorised to carry out consumer credit related activities, as the data is as yet incomplete. The FCA has said that they will wait until all firms complete the authorisation process and begin reporting complaints data before this data is published.


The most complained about products were current accounts – which accounted for almost a quarter of complaints. PPI, credit cards, and other general insurance products each accounted for 11% of complaints. The total redress paid for all complaints decreased by 35%, with the average redress paid for non-PPI complaints decreasing from £192 to £180.


Complaint timescales held steady, with 49% of non-PPI complaints being closed within 3 days of receipt, and 93% of non-PPI complaints being closed within 8 weeks.


FCA - proposed updated financial promotions rules


The FCA has published a discussion paper on potential changes to the financial promotion rules for high-risk investments and for authorised firms which approve financial promotions.


Identifying three areas where changes could be made to protect consumers from harm, the feedback the FCA receive will be taken into account when they consult on changes later in the year. The closing date for comments on the discussion paper is 1 July 2021.


The FCA highlights that high-risk investments have been used by increasing numbers of consumers due to long term social, economic, and technological changes, and the pandemic has accelerated consumer uptake as individual financial circumstances change. The Regulator has also identified that the use of new platforms that make it easier to invest may have led to individuals that self-assess as having a lower risk appetite using high-risk investments due to ease of access.


The discussion paper focuses on ensuring that consumers are assisted to be able to understand and assess the features of the investment, the costs they are likely to incur, the risks and benefits and whether the investment will meet their needs.


The changes suggested will mean that communications should be specifically designed to ensure that consumers are given the information they need to understand those aspects, and that additional requirements to the fair, clear and not misleading rule may be needed to support that.


The discussion paper asks for input on which investments should be subject to stricter marketing rules, the content of promotional materials and supervisory concerns.


Financial Services Conduct Regulation – an outcomes based approach


A recent speech by Charles Randell, Chair of the FCA and PSR reiterates that the FCA is confident that an outcomes-based approach will help to ensure better customer experiences in the post-coronavirus world.


In the speech, Randell uses the example of ‘treating customers fairly’ to support the view that a transformation towards an outcomes-based approach will be a long and arduous, if ultimately successful, one. The Principles for Business are due to turn 20 years old later this year – and the requirement to ‘pay due regard to the interests of its customers and treat them fairly’ is one of the Principles. It took a further five years for the FSA to assess industry progress in embedding the principle, and for the FSA to implement the six consumer outcomes. Following this, Randell says, the FSA fell back into measuring and assessing inputs, rather than the outcomes for consumers.


In the near future, it looks as though the FCA will concentrate on defining the right outcomes, and testing new measurement metrics. The speech suggests that the measurement metrics, at least, will likely be qualitative in the main, and for the FCA to decide on an emerging basis. Defining what makes a ‘healthy consumer credit market’ is a difficult task – examining and explaining how to measure that even more so. Quantitative and statistical measures to prevent a specific issue, such as applying a Rent to Own price cap, are far more straightforward, and so these elements may be the more immediate focus of the Regulator.


Randell acknowledges that the FCA’s target is ambitious, but thinks that so far, outcomes-focussed regulation has had some measure of success. Looking to the future, the FCA will firstly aim to ‘embed a focus on consumer outcomes’ in their governance processes, then to build and communicate the outcomes that will help the Regulator to understand what action is needed.


In the near future, the FCA is soon to consult on a new Consumer Duty that will set out the expectations of how firms define the outcomes their customers can expect from their products and services and how they measure and demonstrate whether those products and services are producing those outcomes.


With the fair treatment of customers remaining high on the FCA’s agenda, now is a good time to review how well TCF, the six outcomes, and Individual Conduct Rule 4 are understood and put into practice. Our online training course on Treating Customers Fairly explains the background to TCF, the FCA’s expectations and why compliance matters, and how each individual can play an integral part. Priced at just £15 per user, the course is accessible at the delegate’s convenience and provides a certificate upon successful completion, allowing firms to track and record each user’s progress.


For large groups, we can offer a simplified enrolment service and pricing, simply email Robert.bell@rbcompliance.co.uk.




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