FSA forces worst financial firms to publish their complaints data to create more transparency in the industry

Written by Ray Clancy

Monday, 01 February 2010 09:52

The UK’s worst performing financial firms will be forced to publish complaints figures under new rules published by the Financial Services Authority.

It says that any firm that receives over 500 complaints in a six month period will have to provide data on five product areas; banking, home finance, general insurance, life and pensions, and investments. The FSA will then publish consolidated complaints data twice a year.

This will include information on how many complaints they have opened and closes, the percentage of complaints closes within eight weeks and the percentage of complaints upheld.

The move is aimed at helping financial consumers see how companies are performing and to drive up complaints handling standards in financial services, the regulator said.

‘We are committed to greater transparency where this will help consumers. For the first time people will be able to see how many complaints particular firms receive and how they handle them,’ said Sheila Nicoll, the FSA’s director of conduct policy.

‘We believe that this will help improve how firms treat their customers and provide incentives for firms to deal more effectively with complaints when they are received. Our more intensive approach to supervision places a greater focus on assessing how firms deal with their customers and how firms handle complaints is a key part of this,’ she added.

Firms are due to publish their first figures by 31 August and will have to display the information prominently on their websites. The FSA will publish consolidated data in September which will also be available on its website.

Independent complaints body the Financial Ombudsman Services revealed last September it upholds the vast majority of complaints it receives against banks and other financial firms. It showed that Barclays had by far the most number of complaints against it that were referred to the Ombudsman, followed by Lloyds TSB and Halifax/Bank of Scotland.

The difference between these figures and the new FSA rules is that the FSA version will contain all complaint numbers, not just those that make it to the Ombudsman.