Firms' Handling of Complaints During COVID-19

The FCA published a statement on how firms should handle consumer complaints during the current coronavirus pandemic. It was noted that the guidance would be updated in 3 months’ time.

Complaint Handling Capacity and Priorities

The FCA considers that firms should take all reasonable steps to ensure continued complaint handling. Should a firm be unable to do so effectively, for example due to staff working from home, firms may choose to keep a minimal physical presence at their offices. 

The FCA states that firms should prioritize paying complainants who have accepted the redress offered to them; promptly resolving complaints from vulnerable consumers and from small business who may suffer severe financial harm and providing a timely holding response where a vulnerable complainant’s issue cannot be resolved promptly.

Vulnerable Consumers

The definition of a vulnerable consumer is described as being “someone whose circumstances make them especially vulnerable to harm if a firm has not acted with appropriate levels of care”. Such circumstances may include poor health, difficult life events and reduced language or cognitive skills.

The FCA highlights that, in light of the coronavirus pandemic, circumstances causing vulnerability may be heightened. In some cases, individuals who would not normally consider themselves to be vulnerable may do so due to loss of income from unemployment or being furloughed, or from poorer mental and physical health. 

Firms should also be reminded that micro-enterprises and small businesses may also find themselves in situations that can make them particularly inclined to harm where their complaint is not addressed fairly.

Maintaining the Quality of Complaint Handling

The FCA notes that it expects the quality of complaint handling to be maintained and that firms should continue to meet their obligations to investigate complaints competently and provide appropriate resolution.

Firms should note that the Financial Ombudsman Service’s (“FOS”) explanatory leaflet can be provided to complainants electronically and that they may need to consider setting up other complaint channels for consumers who do not use online communications. 

Firms Experiencing Difficulties

Where a firm is unable to comply with complaint handling requirements stipulated by the FCA, such as the requirement to provide a final response to complainants within 8 weeks, they should contact the regulator and provide information of the steps being taken to address their non-compliance. 

Claims Management Companies and the Financial Ombudsman Service

In its statement, the FCA also sets out its expectation that claims management companies provide firms with a reasonable amount of extra time to issue their final response before referring complaints to the FOS. The FCA also reiterates that the FOS will take all circumstances, including difficulties that firms have faced during the pandemic, into account when determining a complaint. 

To read the FCA’s publication in full, please click here.