FCA - CP 4/30 - Improving Complaints Handling
Response to the consultation
In general we support the proposals in this consultation. Credit unions receive a tiny minority of the complaints lodged against financial firms each year. As co-operatives, owned and controlled by their members, they have only their members’ interests to fulfil and they therefore generally provide quality customer service.
The proposal to increase the time period for informally resolved complaints to three working days is positive, since this will allow an even greater proportion of credit union complainants to be dealt with efficiently and effectively. Reporting on these complaints and issuing a summary resolution communication in such cases are also reasonable requests.
In relation to the proposals around the transparency of complaints data we have some queries as to the specific treatment of credit unions which we would appreciate clarification of. Under the Credit Unions Sourcebook (CREDS) 9, Complaints Reporting Rules for Credit Unions, credit unions are provided with a bespoke complaints reporting framework. This includes an annual-only return (as opposed to bi-annual) and a credit union specific return form. Credit unions also remain subject to DISP in relation to treating complainants fairly but it is not clear to us how the present consultation interacts with this framework.
Notwithstanding the above request for clarification, we are very keen to support the provision of a simplified reporting mechanism and return for those firms with less than 500 complaints annually. This would capture all credit unions and we welcome the effort to provide for proportionality within the proposed complaints framework. This is entirely appropriate given the fact that 95% of complaints – and therefore 95% of complaint data – relate to firms with more complaints than this each year.
We have no objection to the proposals in relation to call charges. We agree that it is in the best interests of consumers to allow them to contact their providers at a local rate post-contractually. Due to credit unions’ member-led mission, there are very few credit unions which to our knowledge currently utilise premium rate numbers. However, for the handful that do we would request full clarity and early notification of the proposed deadline for implementation to provide as much time as possible for our members to update their phone systems. We are aware of at least one whose phone system is subject to the control of a landlord and therefore it must not be assumed that switching telephone lines is always as straightforward as it might seem.
In relation to the implementation of the ADR, we have no major comments to make. Guidance as to the expectations upon credit unions and other firms would be welcome, particularly in relation to communication of the right to seek resolution with FOS, the implications of consenting to direct resolution by FOS and the new rules surrounding time limits and voluntary submission to the FOS’s jurisdiction following their elapsing.
To reiterate, as a responsible sector responsive to the needs of our members, we are generally satisfied that these proposals will support positive outcomes for consumers. We only seek clarity as to how they specifically apply to credit unions, advance warning as to the implementation of call charging restrictions and guidance as to the application of ADR and other requirements
You can download the PDF version of the consultation response on the right hand side.