As part of the Consumer Credit Act which comes into force on April 6, the Financial Ombudsman Service will review consumer credit complaints.
This means that how a consumer credit licence holder handles complaints will affect its ability to obtain or renew a licence.
Robert Sinclair, associate director of the AFB, says: “AFB members need to make sure they have procedures in place to comply with the complaints handling rules. It will also be important for members to consider if they need professional indemnity insurance cover or whether their existing policies cover the new regime.”
The factsheet details which complaints can be referred to the FOS, how the FOS is funded, details of PII, what members need to do to prepare for the changes and information on complaints handling requirements and deadlines.
The factsheet will also help firms design and implement complaints procedures and provide ideas on how to improve the complaints experience for customers.
Under the new legislation, private individuals, small businesses and charities can make consumer credit complaints and the FOS can make awards of up to 100,000 per case.
Matt Cottle, commercial director of Yes Loans, says: “If there are any complaints about Yes, brokers won’t want to forward us custom. So dealing with complaints is as vital for our broker relationships as it is for our customers.
“With this in mind, and in the light of recent payment protection insurance problems, complaints are of paramount importance to us. This legislation will be good for the industry.”