Consumers and financial services firms are facing "appalling" delays at the Financial Conduct Authority as its watchdog warns the past year has been "dominated" by shortcomings in the regulator's complaints team.
In a continuing theme which has gained traction in recent years the Complaints Commissioner warned in its annual report, published yesterday (July 17), that delays and quality problems at the FCA's complaint scheme had deteriorated further.
Commissioner Antony Townsend said despite "repeated warnings" to the regulator, complainants were still "at their wits’ end" because cases had been delayed, deadlines missed, the FCA had failed to send "promised updates" and investigators had left the regulator part-way through investigations.
Mr Townsend did acknowledge the FCA had put in place steps to address some issues and credited the regulator for being "candid" about problems in its complaints handling.
For example, new senior managers had recently been placed in charge of the complaints team with "ambitious plans for improvement".
But he warned the FCA had still not succeeded in dealing with its "backlog or effectively strengthening its quality control", with the complaints scheme "simply not coping" with the volume and complexity of its work.
Mr Townsend said: "There are clear examples of significant regulatory issues not being identified, despite complaints investigations.
"This may, in part, be due to the overload experienced by the complaints team but – not for the first time – this report cites examples of matters which ought to have been uncovered by the FCA’s investigations, and shortcomings which the FCA was reluctant to admit."
The commissioner received 205 complaints against the FCA in the year 2019/20, 29 of which alleged it had failed to regulate the financial services industry properly.
The total number of complaints against the FCA had risen from 169 last year, an increase of 21 per cent and a rise partly attributed to a spike in complaints relating to the London Capital and Finance scandal.
Mr Townsend added: "The regulators’ failure to address suggestions for improvement to the scheme, and in particular to clarify the policy on compensation under the scheme, suggests a reluctance to give the needs of complainants sufficient priority.
"Though I am pleased to say that at the time of writing it appeared that they were finally about to issue a consultation on the issue."
The report comes in the wake of action taken by MPs earlier this year to address "troubling" concerns surrounding the way the FCA handles complaints from consumers.
The concerns are part of an ongoing theme at the regulator, with the commissioner's annual report published last year flagging "repeated approaches from complainants who have been frustrated by missed deadlines and lack of information".
In his most recent report Mr Townsend said: "Despite my repeated warnings over a sustained period – the FCA has not yet established a complaints function with the resilience required to deal with the kinds of problems which an organisation of its size and responsibilities requires.