Before ‘tragic TV star’ Michael Barrymore’s much-publicised fall from grace, he fronted an appalling programme called Kids Say The Funniest Things, in which young children would either talk on a topic and get completely the wrong end of the stick, or talk about their parents and embarrass them with their ‘funny’ comments. The programme was particularly shoddy but having spent a weekend with my 18-month old nephew, I would quite happily watch a marathon session of this rubbish, rather than go through the frustration of trying to work out what my nephew is attempting to say.
Being only a year-and-a-half, the nephew makes plenty of noise but very little sense. I found myself continually repeating the questions, ‘What do you want?’ or ‘What are you trying to say?’ Parents seem to instinctively know what their offspring want and need but how do the rest of us get from ‘Ugh, agh, ugh’ to ‘I want some of your orange squash’. I need an interpreter to understand this confusing ‘language’.
I only mention this because over the last year or so many AMI members have commented on the ‘noise’ coming from the Financial Services Authority (FSA) on its ‘Treating Customers Fairly’ (TCF) initiative. Making sense of that ‘noise’ has not always been easy, especially for the smaller firms who haven’t got the time or resource to put the business on the back burner, get their ‘regulatory phrase book’ out and go to work on the FSA’s TCF output. This, of course, is where AMI can help. We have already published two TCF factsheets and we are here to interpret and put into plain English what is required of firms.
Confusion
The FSA have also recognised that many firms have felt slightly confused on decoding what it wants firms to do and what it wants the whole TCF project to deliver. Earlier this month the FSA published its latest progress report on TCF and this paper attempts to give firms a steer on both these questions.
The paper, entitled ‘TCF – towards fair outcomes for consumers’, attempts to answer the various questions regulated firms clearly have on the initiative. For instance, the ‘What do you actually want?’ question is tackled by outlining six desirable outcomes that the FSA wants to see for consumers. These outcomes will mean that consumers:
- are dealing with firms where the fair treatment of customers is a key part of the corporate culture;
- are marketed and sold products in the retail market that have been designed to meet the needs of identified consumer groups and are targeted accordingly;
- are provided with clear information and are kept informed before, during and after the point-of-sale;
- are provided with suitable advice which takes account of their circumstances;
- are provided with the product performance they have been led to expect by firms with which they deal and the associated service is both of an acceptable standard and as they have been led to expect;
- do not face unreasonable post-sale barriers when they want to change product, switch provider, submit a claim or complain.
Deadline
Up until now, the regulator has not given firms a deadline date by which time they must be making satisfactory progress in their TCF responsibilities. This has now changed. The FSA has said that firms will have until March 2007 ‘to demonstrate that they are taking the initiative seriously’, and added firms should ‘step up a gear’ in making both cultural and behavioural changes. It has stressed enforcement action will take place where firms do not reach the FSA’s TCF standards and where there is significant potential for, or actual, consumer detriment.
This deadline has been set because of two key findings:
Firstly, the FSA says, in terms of firms’ progress with TCF, the picture is mixed. It says the majority of firms are making good progress, while others are ‘lagging behind’.
The second finding focuses on senior management. The FSA believes while the senior management of most firms are showing ‘a commitment to reviewing their practices and introducing changes where necessary’, this is not filtering through to the customer-facing front-line staff.
The FSA deadline for compliance with TCF should be taken seriously. We are reassured by recent research conducted among members but some firms clearly have work to do. Our research revealed 95 per cent of members are now either ‘very aware’ or ‘aware’ of TCF. This is an improvement on corresponding research conducted in August 2005 which revealed 86 per cent were ‘very aware’ or ‘aware’. AMI also asked members to what degree their firms had built TCF into their operations. 47 per cent answered ‘wholly’, compared to 38 per cent last year, while 41 per cent answered ‘partially’, compared to 33 per cent last year. 71 per cent of firms have already conducted a TCF review in their business. When asked what changes were made following this review, 37 per cent said a ‘few’, 16 per cent said ‘some’, 1 per cent said ‘major, while 16 per cent had made no changes.
Our message is for firms to now push ahead with their implementation. Members can begin this process by using AMI’s TCF factsheets. The first is an introduction to the initiative, while the second looks at how firms (especially smaller firms) can implement TCF into their businesses. Both can be downloaded from the AMI website at: http://www.a-m-i.org.uk
