The FSA has set out its proposals for how the Financial Conduct Authority will handle super-complaints brought by consumer bodies and reports of regulatory failings by firms and the Financial Ombudsman Service.
In a guidance consultation this week, the FSA says super-complaints can be brought by designated consumer bodies where they have concerns about aspects of the UK financial services market which they believe are significantly damaging consumer interests.
Similarly, firms and the FOS can raise concerns with the FCA about failures by regulated firms which are leading to consumer detriment.
Consumer bodies bringing super-complaints will need to evidence their claims, providing documents on practices such as high-pressure sales tactics and exit or switching costs. The Treasury has not yet announced which oranisations will be considered designated consumer bodies.
Firms or the FOS wishing to raise concerns with the FCA will need to establish a regulated person or persons has demonstrated a “regular failure” to comply with regulatory requirements, which has resulted in a consumer loss which would be remedied if the client brought legal proceedings or would result in an upheld FOS complaint.
The FCA will be required to respond to a super-complaint or reference within 90 days, and can dismiss complaints that are “unfounded, frivolous or vexatious”.
Possible outcomes include enforcement action and initiating a consumer redress scheme.
Essential IFA managing director Peter Herd says: “I support the idea of a formal channel to report concerns to the regulator but, for this to work, regular feedback to the complainant will be essential.”