The FSA is to crack down on the way firms deal with mortgage endowment complaints, saying it is “disturbed” by the way complaints are being handled.
A key features document risk warning will no longer be enough on its own to justify rejecting a complaint.
Speaking at an Infoline conference on the regulation of after sales processes in London this week, FSA director (consumer division) Christine Farnish said the industry had for too long got away with leaving critical information buried in the small print of key features documents.
The FSA will be issuing new guidelines for handling mortgage endowment complaints next year following concerns that too many complaints are being rejected.
It is also looking at the possibility of publishing comparative data on complaints and will be watching the industry closely to make sure rules are followed.
The move follows a recent stark warning to the industry that the FSA is getting tough on complaints after slapping a £1.4m fine on Gan Life & Pensions for complaints failings.
Farnish said: “We are disturbed by the way complaints are being handled. Consumers say they were told the policy would pay off their mortgage but the small print said it was not guaranteed. Complaints are rejected on that basis. There will be more guidance and careful monitoring.”