FCA complaints handling review findings

The FCA has published its findings of the review of how Non-deposit Taking Mortgage Lenders (NDTMLs) and Mortgage Third-Party Administrators (MTPAs) handle complaints.

In particular the review looked at how NDTMLs and MTPAs treat their customers, whether their complaint handling arrangements pose any potential consumer harm, and how they could handle complaints better.

The FCA found that overall the firms had a positive attitude towards undertaking a root cause analysis of complaints. However, it is not always clear how firms use their management information to deal with the underlying reasons for complaints.

With regards to complaint handling operations, the FCA found that some firms look to follow the FCA rules with a tick-box compliance approach, while not fully appreciating the effect on customers. In addition, some firms aren’t effectively applying lessons learned from determinations by the Financial Ombudsman Service.

In order to overcome the issues identified, the FCA set out measures firms should take, including that firms should:

  • ensure that the management information they collect and analyse is accurate and relevant to its operations;
  • establish and maintain effective and transparent procedures for the reasonable and prompt handling of complaints; and
  • record complaints accurately and ensure their internal systems and controls allow staff to identify and record complaints correctly.