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.
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 received | 2015-16 | 2014-15 |
| FCA | 82 | 61 |
| FSA | 1 | 11 |
| PRA | 1 | 2 |
| BoE | 0 | 1 |
| Total new enquiries and complaints against the regulators | 84 | 75 |
| Enquiries and complaints against other organisations, redirected | 52 | 41 |
| Total new complaints and enquiries received | 136 | 116 |
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 2015-16 | 2015-2016 |
| Complaints in progress at start of period | 19 |
| New complaints received | 84 |
| Re-opened complaints | 37 |
| Total number of complaints dealt with | 140 |
| Complaints in progress at end of period | 27 |
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 making | 11 |
| Failure to regulate properly | 18 |
| Failure to disclose regulator action against a firm | 6 |
| Fees/FSCS levy | 4 |
| Deferral due to continuing regulatory action | 3 |
| Other | 18 |
| Total | 60 |
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.
In 18 instances complainants alleged that the FCA failed to regulate the financial services industry properly, with many hinging on a specific firm as an example. In these cases, complainants were usually pursuing a dual course of action along with the Financial Ombudsman Service.
Recent increases in the Financial Services Compensation Scheme levy for pension advisers resulted in complaints to the FCA, and subsequently to the commissioner, about the level of annual fees charged.
Mr Townsend said he recognised the impact of the levy increase impact on small businesses, but noted this type of complaint is excluded from the scheme. “In such cases, complainants are advised to pursue the matter through the FCA’s practitioner panels, and through their MPs.”
The FCA responded to the report, stating it is working on many of the points raised.
Specifically, the regulator admitted having not achieved the speed it would like in responding to complaints, although it pointed out during 2015-16 over 80 per cent were concluded within eight weeks of receipt.
The FCA accepted that on occasion it demonstrates “insufficient curiosity” in pursuing complaints, noting this is reflected in the number of complaints (25 per cent) upheld in whole or in part in 2015/16.
Responding to the commissioner’s call for adequate complaints team staffing and training, the FCA stated it has now restructured the team with additional experience, as well as introducing a new case management system “which is delivering significant improvements to the way we handle complaints”.
The complaints scheme has been running since April 2013 and earlier this year the FCA started a consultation aiming to revamp the way complaints are reported and responded to.
peter.walker@ft.com
