Can new FCA complaints data improve compliance?

Nov 3rd '17

The Financial Conduct Authority (FCA) has released its latest complaints data, covering the first half of 2017.


What does the data tell us, and how can you use it to improve your compliance?


Complaints to the FCA up in 2017

Every six months, the regulator releases data on complaints in the last half year.


The newly-released data, covering 1 January to 30 June 2017, shows that 3.32 million complaints were recorded by firms in the first half of 2017, compared to 3.04 million in the second half of 2016.


This increase is partly due to the fact that, since June 2016, firms have been required to report all issues that were resolved by the end of the next business day, whereas previously these were excluded.


This has increased the number of complaints reported; H1 2017 is the first half year in which all firms are reporting under the new rules.


How does 2017 data compare to the previous year?


  • 43% of all complaints made during the first half of 2017 related to ‘advising, selling and arranging’. This compares to 59% in the first half of 2016.
  • ‘General administration and customer service’ account for 38% of all complaints – up from 27% in the first half of 2016.
  • In terms of products, payment protection insurance (PPI) remains the most complained-about, making up a third of the total in the first half of 2017 (1.1 million).
  • This compares to 934,965 received in the first half of 2016, and the FCA believes it represents a real increase (as opposed to one brought about by the changes in reporting) as few PPI complaints are resolved by the end of the next business day).
  • The total redress paid to consumers was £1.99 billion in the first half of 2017. 82% of this related to PPI.
  • 43% of all complaints received in the first half of 2017 were closed within 3 days.


What products are most complained about?

PPI remains the most-complained about product, up by 24% from 899,000 to 1.11m year-on-year.


Current accounts are the next most complained about product, with 518,579 complaints, followed by credit cards with 309,875.


However, these complaint numbers can be misleading, as the number of current accounts, for example, is far higher than the number of packaged accounts.


The new way the FCA collects data means we can compare ‘complaints per 1000 sales or accounts’ – which puts the figures into context.


This shows that:


  • Home finance products (for example, mortgages) are the most complained about product category with approximately 8 complaints received for every 1,000 accounts with outstanding balances
  • Second and subsequent charge mortgages receive 42 complaints per 1,000 balances outstanding
  • Impaired credit mortgages received 31 per 1,000 balances outstanding
  • Packaged bank accounts receive an average of 23 for every 1,000
  • Insurance and banking complaints equal approximately 3 complaints for every 1,000 accounts.
  • The FCA estimates that PPI has received 40 complaints per 1,000 policies in force


What do most complaints relate to?

The regulator classifies the reasons into five categories:


  • Advising, selling and arranging
  • General administration and customer service
  • Information, charges or product performance
  • Arrears related
  • Other reasons


Over recent years, advising, selling and arranging issues have generated the most complaints – although since the new return (including complaints closed within one business day) was introduced, the proportion of advising, selling and arranging complaints has fallen while the proportion relating to administration has increased.


How to avoid appearing in the next round of data

So – what can this teach us and how can it help to ensure your firm avoids an appearance in the next set of FCA data? What can you do to avoid complaints?


  • Make sure your advising and selling processes are up to scratch. With advising, selling and arranging issues making up the bulk of complaints, making sure your financial promotions are compliant is key.
  • Brush up on customer service and administration. Poor customer service is also the second most popular reason for people contacting the FCA. Getting it right means making sure you comply with the Treating Customers Fairly and meeting requirements on suitability of products and solutions
  • Follow best practice when communicating with existing customers. And don’t forget that from January 2018, communications to existing customers will be classed as financial promotions under new MiFID II regulations, and will be regulated accordingly. Find out what you need to do now to ensure your financial promotions comply with MiFID II.


You can read more on the latest FCA data on its website, including information on specific firms. And if you want to read more about how to produce compliant financial promotions and communication, you can contact us.


At LS Consultancy, we offer a complete solution with a range of self-service, cost effective, compliance, marketing, social media products and services that are uniquely suited to supporting firms. Explore our full range today.