Every firm receives complaints. Even though complaints are sometimes viewed as something to be afraid of, or take up too much time that could be spent on other areas of the business, complaints are good!
They are one of the most valuable sources of feedback that firms can receive. Complaints provide firms with the opportunity to put things right where they have not gone so well which drives continuous improvement, helps to retain existing customers, attract new customers and improve the reputation of a firm. Also, complaints data is an important source of information for firms and the FCA in helping to understand current or emerging customer harms and market trends.
Cognisant of the burden that regulatory reporting places on firms and on ensuring that the information they receive is useful, the FCA is making some changes to complaints reporting as set out in PS25/19: Improving the Complaints Reporting process as follows:
Single complaints return:
There will be a single complaints return which will replace five of the existing complaints returns reducing duplication, improving consistency and streamlining reporting for firms.
Reporting based on firm’s permissions:
Complaints reporting will be based on firm’s permissions, which means that they will only need to complete the sections of the new return which are relevant to their regulated activities.
Nil complaints returns:
The option to report nil complaints will be provided at the start of the new return, making it simpler for firms who have no complaints to report.
Group reporting removed:
Going forward complaints data will be reported at individual legal entity level rather than at Group level, which will help to improve accuracy and transparency.
Updated complaint categorisation:
Changes have been made to the way complaints are categorised to better reflect products and services offered by firms and reducing reliance on the “Other” category.
Complaints from customers in vulnerable circumstances:
Firms will be required to report on all complaints where the complainants has been identified as vulnerable. They will also be required to report on whether the complaint relates to the firm’s failure to consider or respond to customer’s vulnerability.
Retention of contextualised complaints data for retail banking, insurance, payment services and claims management companies (“CMCs”):
Firms in the above sectors will continue to capture contextualised complaints data in a similar way to how they do this now.
Reporting periods:
All firms will report complaints data on a fixed 6 monthly and calendar year basis, which means that some firms who currently report annually (i.e. funeral plan providers, CMCs, Payment Service providers and some consumer credit firms), will now report twice a year.
Threshold for publishing complaints data:
Complaints data will be published for firms receiving 500 or more complaints, so only data of larger firms will be published individually.
The first reporting period under the new arrangements is 1 January to 30 June 2027, so firms have 12 months to implement any changes required. The FCA intends to provide clearer guidance for firms on the new reporting requirements and further communications about the new return are expected over the coming months.
If you want to discuss the new complaint reporting requirements, please do get in touch.
