Vow to tackle long waits to make a complaint

·3 min read
Man at a computer (stock image)
Man at a computer (stock image)

The financial regulator says an overhaul of its rules will tackle some of the biggest frustrations held by consumers.

Under the new Consumer Duty, it should take customers no longer to make a complaint than to be sold a product.

The Financial Conduct Authority (FCA) is updating its rules on the treatment of customers to focus on clarity and value.

It said that should include ending long waits on the phone or rip-off fees.

Sheldon Mills, executive director of consumers and competition at the FCA, said: "The current economic climate means it's more important than ever that consumers are able to make good financial decisions. The financial services industry needs to give people the support and information they need and put their customers first."

The changes are a complex rewriting of some of the FCA's rules for the 60,000 financial firms it regulates. These cover a range of sectors from banking to insurance, but are yet to include buy now, pay later services and cryptocurrency businesses.

However, at their heart is a requirement that firms provide products that meet their customers' needs, and ensure adequate support is provided as and when people need it.

The regulator said financial firms would need to collect, and be judged on, data that includes:

  • making it as easy to switch or cancel products as it is to buy them in the first place, without "hiding behind chatbots"

  • customers not waiting so long on the phone to customer services that they give up

  • ensuring key information is not buried in lengthy terms and conditions

  • focusing on diverse needs of customers, particularly the vulnerable

Firms must abide by the rules for new and existing products by the end of July next year but, for older - often more complex - products no longer for sale, the rules will not be fully implemented until the end of July 2024.

"The FCA will likely receive some flak for this decision, especially given much of the worst detriment in terms of things like high charges and poor service often sit squarely with firms no longer actively trying to win new business," said Tom Selby, from investment platform AJ Bell.

Woman reading bill
Woman reading bill

The FCA pointed out that only 30% of people thought financial firms were honest and transparent in how they dealt with their customers.

Mr Mills denied that the new rules were an admission that current regulation failed to keep up with new developments.

He said that the impact of the new Consumer Duty should be felt by consumers through greater confidence that they were being dealt with fairly.

Matthew Upton, director of policy at Citizens Advice, said: "Customers should get good service at a fair price. Yet time and time again we see firms overcharging loyal customers, selling poor products and making it tricky for shoppers to make careful, informed decisions. In a fast-changing world, it's harder than ever for regulators to adapt and protect consumers.

"We support the FCA's Consumer Duty, but the wait for it shouldn't be seen as a green light for firms to play fast and loose with customers while they can."

Last month, Nausicaa Delfas, the interim chief financial ombudsman, said victims of poor service from financial firms should have problems dealt with speedily, particularly during uncertain economic times.