A cooperative committee has been formed by the FSA, FOS and Office of Fair Trading to help identify and review emerging complaint risks.
The FSA, Financial Ombudsman Service and the Office of Fair Trading have joined forces to create a cooperative committee to help identify and review emerging complaint risks that could ultimately be the cause of extensive consumer detriment.
‘The Coordination Comittee’ was first proposed in a discussion paper titled ‘Consumer Complaints (Emerging Risks and Mass Claims)’, which was published last March.
Yesterday the FSA published its feedback statement which illustrates the set-up of the newly established committee.
The Coordination Committee has so far held three meetings including two pilot meetings in the second half of 2010. The last meeting, which was held in February of this year, was chaired by FSA director of conduct policy Sheila Nicoll. Last March when the first discussion paper was released Nicoll stated, “Complaints handling is a priority area within the FSA’s intensive supervision agenda. The Coordination committee is a clear indication of the intention, and will, of the authorities to work even more closely together to improve the experience of consumers, and to avoid problems happening in the first place.”
Minutes taken from the February meeting revealed worries about exchange-traded funds and exchange-traded products and whether consumers were being made aware of the expense of self-invested personal pensions (SIPPs) in comparison to alternative products.
Products such as ‘Debt Freeze’ or ‘Debt Waiver’ were also addressed as a potential concern, particularly if they are sold on the basis of ambiguous product terms.
Within the FSA’s feedback statement, they also highlighted the issue of claims management companies (CMCs). The FSA says it will soon release a joint statement with the Ministry of Justice, specifying firms’ responsibilities where they receive complaints from CMCs.
The FSA has said, “We recognise concern about the quality of services provided by some CMCs to complainants and the impact that CMC activity can have in escalating the number of complaints about an issue.”
“In our view, the extent to which CMCs can play a role in fuelling mass claims needs to be balanced against the role they can also play in improving access to justice for consumers of financial services. Key to this is the value for money that CMCs offer consumers, given that consumers have access to complaint handling procedures that are free and intended to be easy to use.”
The Coordination Committee will be publishling an annual account of its activities and the next meeting will be held in May.