The British are not generally known as complainers, but the Financial Services Authority (FSA) is determined to ensure that where grounds for complaint exist in the mortgage market, clients have both the information and opportunity to do so.
It is not about encouraging the British nation to take on the more litigious nature of its American cousin, but about ensuring that, where necessary, redress can be achieved quickly and fairly.
Thinking back over the last 10 years, it is difficult to highlight a time when there was not a financial scandal being played out in the daily headlines. Whether it is concern over self-certification mortgages, pension collapses, insurer insolvencies or mis-sold endowments, tens of thousands of people in the UK have been affected by poorly designed, sold and serviced financial products in recent history.
The FSA’s basic remit is to eradicate these problems and protect the interests of the consumer.
It is no surprise, therefore that complaints handling is high on the regulator’s list when it comes to visiting firms under its remit and ensuring they are operating compliantly and giving a fair deal to clients. Indeed many would say there is no better barometer of a firm’s service than the way it deals with unsatisfied clients.
Basic tenets
To help firms put the right sort of processes in place, the FSA has outlined the basic tenets of its claims handling philosophy and created a timeline by which firms dealing with client issues should act. At each stage there are set actions that have to be completed, and clear provision for the next step of the process has to be given in any client communication.
The FSA wants to elongate the relationship that firms have with their clients, which, it believes, should not simply be based around the point-of-sale. Firms should be considering clients at the inception of any mortgage design and keeping them at the forefront of their minds right through the sale and long into the life of the product. Where problems arise after the sale of the product, clients should not feel they have been cut adrift and by implementing its timetable for dealing with complaints, the Canary Wharf watchdog has mapped out a path which firms should offer their clients in taking up issues if they arise.
Clearly it is not only mortgage providers that are affected but also all firms acting under the auspices of the FSA and as such brokers must be as hot in this area as the lenders whose mortgages they are selling.
A full explanation of what the FSA has in mind when it comes to complaints’ handling can be found at: http://www.fsahandbook.info/FSA/html/handbook/DISP/1
However the basic philosophy is that complaints should be handled in a timely manner, with well-kept records of the communications that take place, and information continually supplied as to the next step in the process should clients need to take the issue further.
Putting the obligation into
practice
As with all of the FSA’s principles-based rules, it is one thing for firms to realise they have an obligation, but quite another for them to understand how to put it into practise on a daily basis in their dealings with clients.
It is specifically for this reason that next month the ifs School of Finance will launch a qualification dealing with the issues that complaints’ handling throws up.
Working in conjunction with outsourced complaints handling specialist Huntswood, the ifs School of Finance will offer the CeRCH (Certificate in Regulated Complaints) qualification from 1 November 2006.
The aim is to help brokers take the theory of the rules and put them into a workable practical solution when dealing with clients. The qualification will cover: recent major issues in complaints handling, customer segmentation and possible causes for complaint, the regulatory and legislative response, the ‘Treating Customers Fairly’ (TCF) initiative and identifying and applying appropriate solutions.
If brokers can introduce a robust complaints handling procedure that is manned by well trained staff, it will not only protect the interests of their clients, but also their own should matters be taken forward to the Financial Ombudsman Service (FOS). It will also show companies in a good light when visited by the FSA and should give them an opportunity to turn the problems encountered by clients into positive experiences.
The qualification is aimed at both large corporate organisations who, by their very size, are likely to encounter a number of complaints, as well as smaller firms looking to ensure they have the correct knowledge and training in place to ensure that when there is a problem it can be dealt with effectively before it escalates into something very much more problematic.
The regulator may be making it easier for customers to complain, but it is also looking to ensure that customers have less to complain about by making firms improve the standards they are operating to. Those who establish good claims procedures and have qualified staff should also find that in the instances where complaints are made, they are dealt with more quickly and efficiently than in the past. This in turn is cheaper for the firm, prevents the issue from becoming a real problem and should result in reputation and referral benefits for the organisation in the long run.
