FCA Complaints Reporting Changes 2027: New Vulnerable Customer Reporting Requirements

From 1 January 2027, FCA-regulated firms will need to capture additional information about vulnerable customers as part of their complaints reporting.

The changes, introduced through FCA Policy Statement PS25/19, will require firms to report more detailed information about complaints involving customers in vulnerable circumstances and, importantly, complaints where a failure to identify or appropriately respond to vulnerability contributed to the customer’s complaint.

For firms subject to FCA complaints reporting requirements, now is the time to assess whether existing complaints management systems capture the information that will be required.

What Is Changing to FCA Complaints Reporting in 2027?

The new requirements will apply to complaints arising during the reporting period beginning 1 January 2027 and ending 30 June 2027.

The FCA is introducing two new vulnerability-related data fields within the complaints return.

Firms will need to report:

1. Complaints Made by Customers Identified as Vulnerable

Firms must record the number of complainants identified as being in vulnerable circumstances.

This applies whether the vulnerability was:

• disclosed directly by the customer;

• identified through interaction with the customer; or

• identified by the firm through other information or inferred data.

Importantly, the customer’s vulnerability does not need to be relevant to the subject of the complaint for the complaint to be included within this category.

2. Complaints Connected to Failures in Vulnerability Support

Firms must separately identify complaints that relate to, or were caused by, the firm's failure to:

• identify a customer’s vulnerability;

• consider the customer’s vulnerability; or

• respond appropriately to the customer’s circumstances.

This second category is particularly significant because it may provide the FCA with an indication of whether a firm’s vulnerability framework and Consumer Duty controls are working effectively in practice.

FCA Examples: Which Vulnerable Customer Complaints Should Be Reported?

The FCA provides useful examples within PS25/19 which help explain the distinction between the two reporting categories.

Example 1: Vulnerability Exists but Is Not Relevant to the Complaint

A customer complains that a firm's online portal was difficult to navigate.

The customer had previously disclosed a hearing impairment. Although the customer is considered vulnerable, their hearing impairment has no connection with the difficulty they experienced navigating the online portal.

The complaint would therefore be recorded as a complaint from a customer identified as vulnerable, but not as a complaint caused by a failure to respond appropriately to vulnerability.

Example 2: Vulnerability Is Directly Relevant to the Complaint

A customer complains that a firm used overly complex language in its written and verbal communications.

The customer had previously disclosed that they had early-stage dementia and experienced difficulties understanding lengthy documents and retaining information.

In this situation, the customer's vulnerability is directly relevant to the issue complained about.

The complaint would therefore fall within the category covering complaints relating to a failure to identify, consider or respond appropriately to vulnerability.

Example 3: Historic Vulnerability Is Not Relevant

A customer complains about delays when attempting to exit a product.

When the customer originally purchased the product, they were experiencing financial hardship. However, they were no longer in vulnerable circumstances when they experienced the delays giving rise to the complaint.

In these circumstances, the previous vulnerability would not result in the complaint being included within either of the new vulnerability reporting categories.

Why Is the FCA Collecting Vulnerable Customer Complaints Data?

The FCA intends to use the new information alongside firms' wider complaints data to understand:

• what proportion of complainants are identified as vulnerable;

• whether vulnerable customers are disproportionately experiencing problems;

• how frequently complaints arise because firms have failed to recognise vulnerability; and

• whether firms are providing appropriate support when vulnerability is identified.

However, a high number of complaints from vulnerable customers does not automatically indicate poor practice.

A vulnerable customer may make a perfectly legitimate complaint about an issue that has no connection with their vulnerability. The more important indicator is likely to be the number of complaints caused by a firm's failure to identify, consider or appropriately respond to vulnerability.

What Does This Mean for Consumer Duty?

The new FCA complaints reporting requirements should also be considered in the context of the Consumer Duty.

Complaints data is an important source of outcomes monitoring information, and the additional vulnerability data will give the FCA greater visibility of how firms are treating customers in vulnerable circumstances.

For example, the information may help identify circumstances where:

• customer vulnerability is not being recognised;

• reasonable adjustments or additional support are not being provided;

• communications are creating barriers for vulnerable customers;

• servicing or collections strategies are contributing to poor outcomes;

• product design creates additional difficulties for particular groups of customers; or

• firms' vulnerability policies exist on paper but are not working effectively in practice.

If a firm reports both a high proportion of complaints from vulnerable customers and a significant number of complaints resulting from poor vulnerability handling, the FCA may consider whether this indicates potentially foreseeable or preventable harm.

Firms should therefore be capable of distinguishing between:

1. a complaint made by a vulnerable customer, and

2. a complaint caused or contributed to by a failure in the firm's approach to vulnerability.

That distinction will become increasingly important from both a regulatory reporting and Consumer Duty outcomes monitoring perspective.

What Should FCA-Regulated Firms Do Now?

Although the first affected reporting period does not begin until January 2027, firms should avoid leaving implementation until the end of the year.

The biggest challenge may not be understanding the reporting requirement itself. It may be ensuring that the necessary information is consistently identified, recorded, retrievable and reportable within existing systems.

Firms should consider taking the following steps.

Review Your Current Complaints Data

Establish what vulnerability information is currently recorded within complaints files and complaints management systems.

Consider whether you can currently identify:

• whether the complainant was vulnerable at the relevant time;

• the nature of the vulnerability where appropriate;

• how the vulnerability was identified;

• whether the vulnerability was relevant to the complaint; and

• whether the firm's handling of vulnerability caused or contributed to the complaint.

Map the New FCA Data Requirements

Map each new FCA reporting field against the information currently held within your systems. This should identify any data gaps before the first affected reporting period begins.

Review Complaints and Vulnerability Procedures

Complaints handlers need to understand the difference between simply identifying that a customer is vulnerable and identifying whether vulnerability was relevant to the complaint.

Policies, procedures and guidance may therefore need updating.

Consider Staff Training

Complaints teams should be capable of applying the new reporting categories consistently.

Without appropriate guidance and training, different employees may classify similar complaints differently, creating problems with the accuracy of regulatory returns.

Review Data Quality and Governance

Firms should also consider how they will validate the accuracy of the information submitted to the FCA.

Regulatory reporting should not simply be treated as an administrative exercise. Appropriate oversight, quality assurance and governance should be in place to ensure returns are complete and accurate.

Don't Wait Until January 2027!

The key action for firms is to map the information required under the new FCA complaints reporting requirements against the data currently captured within their systems.

Where the required information is not currently being captured, changes to complaints systems, processes, guidance and staff training may be necessary. These changes can take time to implement, particularly where system development is required.

Firms should therefore begin assessing their readiness well before the new reporting period starts on 1 January 2027.

How RB Compliance Consultancy Can Help

As part of our bespoke regulatory update service, RB Compliance Consultancy identifies regulatory developments relevant to individual firms and explains the practical action required.

For this particular change, our bespoke update also provides clients with a data framework setting out the information they should consider capturing to support compliance with the new FCA complaints reporting requirements.

This can help firms identify gaps in their existing complaints and vulnerability data before the new reporting period begins.

If you would like to discuss our bespoke regulatory updates or require support reviewing your firm's approach to FCA complaints reporting, vulnerable customers or Consumer Duty outcomes monitoring, contact:

Robert Bell

RB Compliance Consultancy

robert.bell@rbcompliance.co.uk