The Financial Conduct Authority has found itself in hot water over "significant shortcomings" in its handling of complaints about its supervision of the suspended Woodford Equity Income fund.
In a report published by the Complaints Commissioner today (June 2) the FCA was criticised by its watchdog for persistently ignoring recommendations concerning its complaint handling procedures, especially those considered alongside ongoing regulatory investigations.
The commissioner flagged a number of "deficiencies" in the regulator's handling of a complaint escalated by an investor who lost a pension fund after investing in Neil Woodford's fund.
The FCA had deferred a decision on the complaint until the investigation into the events which lead to the suspension of the fund was completed.
Whilst the Complaints Commissioner agreed this was a reasonable move, it criticised the regulator for poor communication with the investor during that time.
He said the FCA had provided contradictory information to the investor, first telling the consumer the complaint could not be considered alongside ongoing action and then claiming in an email the following month it was "unable to comment" on whether or not there was any action being taken by the regulator.
Complaints Commissioner Antony Townsend also criticised the FCA for failing to signpost the Financial Ombudsman Service or Financial Services Compensation Scheme in relation to the lost pension fund.
Mr Townsend said: "These significant shortcomings in the FCA’s response meant that you did not receive as helpful a response as you should have done, and I can appreciate that you were left feeling that your concerns had been dismissed and treated lightly."
He added: "The FCA twice asked me for additional time to provide its response, despite the fact that this case is a simple one, the matters I have highlighted do not raise complex issues, and it relates to a problem that keeps recurring when it ought not to."
It comes as consumers with complaints against the regulator in relation to the suspension of the Woodford Equity Income fund, and other cases in which the FCA's supervision is under investigation, could see results sooner than anticipated.
Although the commissioner sided with the FCA in deferring the complaint on this occasion, he recommended the deferral should only be for six months and at which point it should be reconsidered and investigated if there was no "real risk of prejudice to enforcement proceedings" in dealing with the matter.
The commissioner warned to wait until all ongoing regulatory action was finished could see consumers wait "many months or years" until they received a decision on their complaint.
The commissioner said issues raised about the investor's complaint would make a difference to "others in a similar situation".
Mr Townsend said: "In making these recommendations, I should record that the FCA has repeatedly agreed in a number of cases to adopt the approach which I have outlined above, and yet persists in not adopting this procedure."