The Financial Services Authority says it has found no evidence that small IFA firms are ‘fobbing off’ mortgage endowment complaints, but did discover some issues with complaints handling practices that firms must address.
Following concerns raised in independent research commissioned by the FSA, the regulator launched a project to examine the complaints handling of small firms in order to assess the level of compliance with regulations, to ensure customers were being treated fairly. Based on a sample of 51 firms and 412 files reviewed, the FSA’s findings identified that in the majority of cases the decisions being made by small firms visited to reject or uphold a complaint are appropriate.
FSA rules allow consumers to refer their complaint to the Financial Ombudsman Service (should they be dissatisfied with the outcome of the firm’s investigation. Of the 562 complaints which were initially rejected by the firms and were subsequently referred to FOS 42 complaints were found in favour of the complainant, 292 were rejected and 228 are pending.
However, the FSA has found some firms are not strictly adhering to rules set out the time limits within which complaints must be dealt and with the general level of firms’ internal complaints handling procedures. In a significant number of cases, the FSA found that these deadlines are not being met.
Mike Lord, head of investments in the small firms division at the FSA, says: “The FSA is greatly encouraged to discover small firms are not fobbing off endowment complaints and are investigating complaints properly. However, issues still remain with smaller firms not meeting the deadlines our rules set out or when complying with their own systems and procedures when they are dealing with customer complaints.
“Firms must have in place and make proper use of appropriate and effective internal complaint handling procedures to help ensure that customers are treated fairly. These include meeting the deadlines for corresponding with complainants and ensuring an appropriate person investigates the complaint. We are publishing, on our website, information to help firms improve in this area.
“While we still see instances of firms not dealing with complaints properly, overall we were pleased with the decision making we saw firms making when undertaking this work.”