FSA “intrusive” on complaints

The Financial Services Authority (FSA) wants to abolish two-tier complaints handling and force companies to carry out a “root cause analysis” of every complaint and name a senior manager responsible for handling complaints.

It wants companies to identify and remedy “any recurrent or systemic problems with complaints, and to take action where appropriate”. It also says firms should take account of previous ombudsman decisions and previous customer complaints and learn from the outcome.

And it wants to increase the maximum Financial Ombudsman Service (FOS) award from £100,000 to £150,000.

Intrusive approach

Sheila Nicoll, the FSA’s director of conduct policy, said: “Good complaints handling standards should be the rule not the exception and complaints handling forms a key part of our intensive and intrusive approach to supervise how firms deal with their customers.

“While the FSA’s review into complaints handling by banks in April found some good practice, this is far from universal and it is clear that not enough is being done by senior management to prioritise complaints handling.

“Dealing fairly and effectively with customers who make a complaint provides a valuable opportunity for firms to rebuild and enhance their relationships with their customers.

“We will continue to work closely with firms to help push up standards in this area and to deliver improvements in the way firms treat their customers and we have already referred two firms to enforcement as a result of poor complaints practices.