Perhaps it’s no coincidence, but on 20th October as Lord Adair Turner (FSA Chairman) addressed his audience (at the Mansion House, London) on the subject of the UK’s new regulatory structure, on the same day, just further down the road, Natalie Ceeney (FOS’s
Chief Ombudsman) addressed her audience (at the Finance and Leasing Association’s 8th annual consumer finance conference) on the subject of consumer credit complaints…
Although, what’s the connection I hear you ask…well it’s the fact that Lord Turner stated “In financial services the potential for the customer to be ripped off is simply far greater than in other sectors of the economy – and the consequences potentially
''The challenge for the Financial Conduct Authority will be how to counter that danger. Parliament will need to equip the FCA with new powers that will be needed to give the new approach effective teeth.”
And Ms Ceeney spoke about what FOS are seeing with regards to complaints and that she’s “afraid things are getting worse. The number of complaints we are receiving involving consumer credit has risen almost four fold in the last three years. The sector
is “losing” almost 60% of the cases that we’re resolving. That’s not good.”
Still not got the connection?
Firms who provide consumer credit, who are not currently regulated by the FSA, are likely to be regulated by the new body the FCA if the government’s preferred option is implemented by the legislation required to change the Financial Services and Markets
Act (FSMA2000). In my opinion, if or when consumer credit is brought into the same regulatory regime as other retail financial services, complaints will be one of the areas that the FCA will investigate first with a view to intensively scrutinizing the conduct
of business activities at the worst offending firms.
Sheila Nicoll (Director of Conduct Policy at the FSA) has been quoted as saying on a number of occasions: “Good complaints handling standards should be the rule, not the exception and complaints handling forms a key part of our intensive and intrusive approach
to supervise how firms deal with their customers. We will continue to work closely with firms to help push up standards in this area, and to deliver improvements in the way firms treat their customers, and we have already referred two firms to enforcement
as a result of poor complaints practices.”
Need I say more?