Regulation  

Complaints Commissioner reprimands FCA

Complaints Commissioner reprimands FCA

The Financial Services Complaints Commissioner has outlined areas of improvement for the Financial Conduct Authority, criticising “an unwillingness to face up to and admit shortcomings” and delays in dealing with “awkward” cases.

Almost all the cases commissioner Andrew Townsend dealt with in the 12 months to the end of March concerned the FCA, according to the FSCC annual report for 2015-16.

Mr Townsend said this is to be expected given the nature of the work of the two other regulators, the Prudential Regulation Authority and the Bank of England. However he pointed to a number of shortcomings at the FCA.

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High staff turnover on the regulator’s complaints team was combined with a significantly rising workload, he said, in the context of a year in which the organisation as a whole faced criticisms and uncertainty.

“My observation, gleaned from studying the FCA’s internal complaints papers and the interactions of my colleagues with FCA staff, is that these factors increased the FCA’s tendency to defensiveness in the face of criticism,” he stated.

“While the FCA continues to deal with the majority of complaints competently and fairly, I have seen examples of an unwillingness to face up to and admit shortcomings, and delays in dealing with awkward cases,” Mr Townsend continued.

He said he had seen a tendency at the FCA to find reasons for excluding cases from the complaints scheme in circumstances where they should not have been excluded.

Mr Townsend told the FCA it must ensure its complaints team has the resources it needs to investigate cases thoroughly and promptly; ensure they have the confidence, authority and internal political backing to pursue duties rigorously; and recognise that the entire organisation has a duty to co-operate openly and promptly with complaints investigations.

The commissioner received 136 new complaints and enquiries during the year - up 17 per cent on the previous year - about a third of which were about financial services providers or other bodies, not the regulators.

Enquiries and complaints received2015-162014-15
FCA8261
FSA111
PRA12
BoE0 1
Total new enquiries and complaints against the regulators8475
Enquiries and complaints against other organisations, redirected5241
Total new complaints and enquiries received136116

In addition to the 84 new complaints received, the commissioner also dealt with cases which were uncompleted at the end of the previous year, making 140 complaints in all.

Complaints dealt with during 2015-162015-2016
Complaints in progress at start of period19
New complaints received84
Re-opened complaints37
Total number of complaints dealt with140
Complaints in progress at end of period27

The commissioner dealt with 139 complaints under the scheme during the year. During the course of the year, 60 complaints were concluded with a “substantive” response.

Concluded complaints 2015-16
Rule making11
Failure to regulate properly18
Failure to disclose regulator action against a firm6
Fees/FSCS levy4
Deferral due to continuing regulatory action3
Other18
Total60

In 11 instances, complainants felt that rules issued by the FCA disadvantaged them in some way - related to the Retail Distribution Review, the Interest Rate Hedging Product Review and the Mortgage Market Review - but these complaints were excluded under the scheme’s rules.