The FCA has proposed forcing firms to report all complaints they receive as the regulator looks to raise transparency requirements across financial services.
Under existing rules, firms only need to report complaints to the FCA where a final response letter is issued. Firms are required to send a final response letter in more complex cases within eight weeks explaining their assessment of the complaint, the firm’s decision and any offer of remediation or redress.
The regulator wants to remove this requirement so all complaints are reported to ensure the information it collects is “accurate and transparent”.
In addition, the FCA proposes extending the “next business day” period for handling complaints less formally to three business days. These complaints will not require a final response letter but will need to be reported.
The FCA says: “A number of large firms resolve most complaints they receive by the close of the next business day, which means that the majority of the complaints they receive are currently unreported.
“This provides an incomplete picture and significantly reduces our ability to make accurate comparisons between firms’ complaint handling, to inform our thematic reviews or to undertake other supervisory tasks.
“There is also a high degree of overlap between the types of complaints handled before and after the close of the next business day, which means there may be only an arbitrary distinction as to whether or not a complaint is reported. Some serious issues remain unreported simply because they are resolved quickly.
“We are also aware that some firms are aiming to handle an increasing number of complaints within the next business-day unreported period – without this change we risk hearing about a diminishing fraction of overall complaints.
“Furthermore, if we extend the next business day period to three business days, as we propose to do, a significant number of complaints that previously would have been dealt with in the formal eight-week period may now be handled within the less formal period.”
The regulator wants to introduce the new requirements in March 2016.