The FCA has issued its latest ‘Dear CEO‘ letter, this time to CMCs in relation to PPI complaints.
The FCA has recognised that lenders are facing very significant operational challenges in being able to deal with the volume of enquiries and complaints they have received in the run up to the 29 August deadline. It has been established that the time being taken to process the enquiries and complaints is far exceeding the usual 8 week period, so much so that CMCs have been informed that typical response times may sometimes stretch well beyond 24 weeks.
As a result of the impact that the volume of enquiries and complaints has had on lenders’ response times, the FCA has made it clear that CMCs must:
- allow lenders a reasonable amount of time to a provide a final response;
- apply the ‘8-week rule’ pragmatically and sensibly before referring a complaint to the Financial Ombudsman Service; and
- act in compliance with its duties under CMCOB.
The FCA have pointed out that the Financial Ombudsman Service may decide that a complaint has been referred to it without the lender being given a reasonable opportunity to respond. In those cases, it is likely to return the case back to the CMC and ask the lender to contact the CMC directly to discuss timings and the way to resolve the complaint.
The FCA has also reminded the CMCs that financial promotions about PPI claims must be fair, clear and not misleading, after expressing concern about the context of some recent promotions. CMCs have been reminded of their duties under CMCOB and that the FCA can ban promotions or adverts, as well as removing temporary permission and refuse authorisation.