In a letter sent to the chief executives of larger mortgage endowment firms and financial advisers the regulator comments that while many firms are achieving the required standards and taking seriously the concerns of policyholders, there are some firms that are failing to meet the required standards.
Clive Briault, FSA Managing Director, Retail Markets, says: "Fair handling of complaints is one of the key indicators that firms are treating their customers fairly.
"We are concerned, in particular, that the FOS is not only continuing to face a rising number of endowment complaints, but is also upholding a very high percentage of complaints from some firms, suggesting that these firms may not be handling complaints properly. Firms should not manage their own caseloads by allowing an excessive number of complaints to flow through to the FOS.
"High uphold rates of complaints against some firms by the FOS also suggests that there may be other customers – who may have complained on issues very similar to those considered by the FOS but have not taken their complaints to the FOS – who may not have had their complaints properly considered.
"The FOS has also informed us that some firms have repeatedly turned down complaints on grounds which appear only very slightly different to those used in connection with earlier batches of complaints which the FOS has upheld. Our own work has also identified inconsistencies in some firms' decision-making. Such behaviour is not in keeping with the spirit or letter of our requirements."
The letter follows one sent to CEOs in April 2002 by John Tiner (then the FSA's Managing Director) which stressed the importance of the fair handling of complaints and said there must be assurance that the industry is handling complaints in a way which provides full and fair opportunity to have things put right for those who have been mis-sold. The FSA believes that, thirty months later, while progress has been made in some areas, concerns still remain that this is not happening in a significant number of cases.
The FSA wants firms to review their policies and procedures for the handling of complaints and confirm that they are appropriate or take any necessary action. The FSA will continue to monitor progress and outcomes to assure itself and the public that complaints are being handled fairly, and to act in any cases where it finds weaknesses that put consumers' interests at risk. The regulator is in dialogue with a number of firms and will be undertaking further detailed supervisory work to test the robustness of firms' complaint handling arrangements in the coming months.
