FCA responds on LCF Complaints

FCA has set out its response to the Complaints Commissioner’s report on its handling of the failure of LCF in respect of assessing complaints against it.  It says it is sorry for the mistakes it made. It has accepted a number of the Complaints Commissioner’s recommendations, specifically:

• that it would have been better to specifically inform complainants of the progress of the Gloster report;
• that it should keep the Commissioner informed of the progress of its Transformation Programme;
• that it should continue to invest in the Register; and
• that it should publish its internal guidance on how it determines ex gratia payments for delays in complaints handling – which it says it will do by the end of April, stressing it is only a guide.

However, it does not accept:

• that the Register was misleading in respect of LCF – FCA says that it accepts the Register could have been clearer but it is not supposed to be the sole source of information. It thinks the Commissioner has concluded the register was misleading simply largely because LCF was on the Register. It says it has to put firms on the Register, and the Register showed what LCF’s correct permissions were at the time. FCA says there is an important distinction between the fact of authorisation giving a halo effect and the register actually being misleading. It says it appreciates the challenges for consumers, however, but feels that all it can currently do is highlight that regulated firms may carry out unregulated activities; and
• that it should remove the “sole or primary cause” test when considering ex gratia payments. It says it has never blocked potential compensation where it is not the sole or primary cause of loss, if this would be appropriate. It says it has already considered complaints within the appropriate factors, so it cannot accept a recommendation to reassess them against what are actually the same factors. The response goes into significant detail about how FCA should make assessments under the scheme. Generally, having considered the relevant factors, it thinks an apology is the most appropriate remedy, and has apologised.