The Financial Services Authority (FSA) has revealed its concerns over the quality of firms’ communications in the area of mortgage endowment complaints.
As part of a study into the endowments market, the regulator reviewed 300 documents for the clarity of communication presentation and style, from 50 financial firms.
Despite revealing good practice in the areas of providing a clear overview of the basis of the complaint, in addition to explaining the rationale and figures involved in the redress calculations, the FSA admitted some firms could improve the clarity and ease of communications. The regulator admitted a small number of firms had failed to acknowledge the complainant’s recollection of events when justifying the decision to reject the complaint, while others gave no referencing tool to support the rejection. It also criticised a number of firms for the use of ambiguous or confrontational language and unexplained abbreviations within their paperwork.
Speaking at the British Bankers Association (BBA) Complaints Oversight Seminar, Vernon Everitt, director of the retail themes division at the FSA, said: “It is clear that firms failed to dedicate sufficient resources and attention to endowment complaint handling early enough.”
He added: “Consumers do not see complaints in ‘terms’ of rules or industry best practice. What matters is whether their complaint was handled fairly.”
Phil Perry, co-director at ARK Financial Services, admitted his concern over organisations focusing unfairly on the endowment market. He said: “We are living in a compensation culture. People will try it on even when they are not fully aware of what they are complaining about. Unfortunately you do get ambulance-chasing companies, which is why you tend to get confrontational responses. People who have genuinely been mis-sold a mortgage endowment tend not to shout loud enough.”
