Covid-19 and complaints: FCA guidance

04 May 2020

On 1 May, the Financial Conduct Authority (FCA) issued a helpful statement for firms on complaints handling, recognising the many difficulties faced by firms in meeting DISP requirements during the Covid-19 "lockdown". This latest FCA statement follows a series of FCA guidance notes for firms on a range of topics in response to the Covid-19 pandemic and its discussions with the financial services industry, as well as Principle 11 notifications made by firms. 

The statement sets out the FCA’s key expectations of firms on their complaints handling processes during the lockdown, and the areas it expects firms to prioritise, being: 

  1. prompt payments of redress;
  2. prompt and fair resolution for potentially vulnerable customers (PVCs) and small businesses facing financial difficulties; and
  3. the sending of holding responses to the groups above where prompt resolution may not be possible.  

It is clear that the FCA expects firms to consider requiring the presence of staff in the office (subject to meeting social distancing requirements) if the priorities above cannot be assured by home-working, and the FCA stresses that firms unable to meet the eight week rule in DISP 1.6 or other key DISP requirements should make Principle 11 notifications to explain the steps they are taking to manage any areas of non-compliance. 

It is also clear the FCA does not expect firms to lower standards or response times in their processes for the submission and acknowledgment of customer complaints and the provision of information to customers about the firm’s complaints processes. 

Helpfully, though, the FCA’s statement also contains guidance for claims management companies (CMCs), including an expectation that CMCs allow firms a reasonable amount of extra time, beyond eight weeks, to give a final response before referring complaints to the Ombudsman Service.

Overall, the guidance underlines the importance of firms’ maintaining PVC policies to consider the needs of vulnerable groups and mark them for priority treatment. Most firms with consumer clients should already have PVC policies in place to identify and consider the needs of such clients. Firms should be checking that these policies are fit for purpose during the pandemic and are scoped to meet the definition of vulnerable customer set out in the FCA’s Approach to Consumers, as well as assessing whether the coronavirus has exacerbated or caused vulnerability in other customer groups. Firms must also consider the needs of small businesses which (although not likely to be included in existing PVC policies) must nevertheless receive priority treatment according to the statement.