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LSB updates on CRM code review

LSB has published its follow up review of the CRM Code in respect of firms’ approach to reimbursing customers. Provision R2(1)(c) of the Code allows firms to decline reimbursement in specific cases. LSB looked at how firms were using this provision in 2019, and has now carried out a follow up exercise including all 9 current signatories.

The review found varying degrees of progress from individual firm action plans, with over half the actions still being open. The original concerns focused on the reasons firms were using to decline reimbursement, which included failure to apply the presumption that victims should be reimbursed unless there was a clear ground for blaming them.

Now, additionally, the LSB is concerned at the time firms are taking to complete investigations, and at evidence that some employees do not understand the requirements of the Code or their firms’ internal processes. It also found evidence that firms are, wrongly, placing significant responsibility on customers to meet a set of standards before they can be reimbursed. LSB is firm that firms must not place pre-determined requirements on customers nor set their bar on what is “reasonable” for a customer to have done too high.

LSB has written to all firms setting out its expectations and timescales for remediation.

Emma Radmore