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FSA complaint handling rule changes
Company bosses will come under the spotlight when new Financial Services Authority complaint rules come into force in July, which will force firms to provide a single, final answer to any complaint that is raised.
Paul Clark, chief executive at complaints management software and technology provider Charter UK warned that heads of complaints within financial institutions need re-evaluate their systems, and processes ahead of the new rules and in the wake of recent fines issued by the regulator.
On the 18 January, the FSA fined RBS subsidiaries' Direct Line Insurance and Churchill Insurance Company £2.17m over its improper altering of complaint files requested by the regulator for review. During the collation of 50 complaint files requested by the FSA, 27 were altered improperly before they were submitted because the firms failed to act with due skill, care and diligence, the watchdog said.
Mr Clark warned that companies must be confident that decision-making controls are in place, with managers overseeing every step of the overall process. He said that this will be "all the more critical" from July 2012 when the single stage complaint handling process comes into force - "the biggest change to complaints handling the industry has ever seen".
The 'two-stage' complaint-handling process will be abolished from 1st July 2012 in favour of a new 'one stage' process. Under these new FSA rules, a firm's first response will be its final response. The FSA hopes that this change will encourage firms to resolve complaints fairly when they are presented for the first time, rather than relying on a customer's persistence – or lack thereof – when pursuing a complaint. He said: "The latest fines by the FSA are further evidence that complaints handling demands a highly specialist approach.
"Nominated heads of complaints within firms must be have complete confidence that the technology in place is able to evidence an entire complaint's audit trail, which is paramount in satisfying the FSA's requirements."