FCA data shows big increase in complaints

Apr 24th '20

On 16 April, the Financial Conduct Authority (FCA) published the complaints figures for regulated firms for the second half of 2019.


The data showed that complaints increased from 4.29m in the first half of 2019 to 6.02m in the second half of the year.


PPI still making up the bulk of complaints

The jump in complaints was driven largely by a 75% increase in the volume of PPI complaints received, which went up from 2.12m to 3.71m.


PPI remained the most complained-about product, accounting for 62% of all complaints received during the period. The second half of 2019 also saw the deadline for PPI complaints (29 August 2019), which presumably drove a last-minute flurry of consumer activity – the Q2 figure was the highest level of PPI complaints reported by firms to the FCA.


This increase in demand also slowed progress in resolving complaints: fewer PPI complaints were closed in 8 weeks during the period (56%, compared to 76% in the first half of 2019).


Outside of PPI, all other complaints also increased by 6%, going up from 2.18m in the first half of 2019 to 2.31m in the second half.


What are the other most complained-about products and services?

Excluding PPI, the most complained-about products were current accounts (accounting for 10% of all complaints), credit cards (6%) and other general insurance products, accounting for 5%.


In some areas, complaint volumes decreased, with complaints about home finance products down from 8.7 to 8.4 complaints per 1,000 balances outstanding.


The number of complaints about banking and credit card products was unchanged, seeing 4.2 complaints per 1,000 accounts in the second half of 2019.


Investment product complaints saw an increase, from 2.1 to 2.3 complaints per 1,000 accounts.


The average redress paid per upheld complaint, excluding PPI, decreased from £200 in the first half of 2019 to £184 in 2019 in the second; for PPI, the average increased from £1,890 in January-June 2019 to £1,942 in July-December 2019.


3,253 firms reported receiving one or more complaint during the last six months of 2019, up from 3,179 in the first six months, a 2% increase. A relatively small number of firms (228) reported 500 or more complaints, accounting for almost 98% of all reported complaints; this is unchanged since the first half of 2019.



The full FCA complaints data can be seen on the regulator’s website.


Keep your firm out of the FCA complaints data

It stands to reason that every firm wants to avoid appearing among the regulator’s complaints data. Data is published by firm, so it’s very easy for potential clients and customers to see how your firm has performed.


If you want to take steps to minimise the risk of complaints about your products, the following suggestions might help:


  1. Treat customers fairly by making promises that are fair and ensuring your products and services live up to them. Read more about how you can convert your client care promises into action in this blog by Simplifie.
  2. Make sure you’re familiar with the FCA’s financial promotion rules. What is the regulator’s definition of a financial promotion and what do you need to do to ensure yours comply?
  3. If you’re creating advertising, the financial regulator isn’t the only one you need to consider. The ASA and CAP govern all UK advertising and you need to meet their requirements too.
  4. Understand the FCA’s Treating Customers Fairly rules – our TCF FAQs provide a good summary.
  5. Promotions that mislead consumers can be a source of complaints – This has tips on how to avoid creating misleading promotions.
  6. Ensuring promotions are suitable is important, and especially so if you’re dealing with vulnerable customers.
  7. Social media can be a source of risk when it comes to regulatory compliance breaches. Our blog details ways you can minimise the risks inherent in your social media strategy.
  8. Make sure your Compliance team review and approval processes are robust, so no unapproved promotions slip through the net. Automation and innovation and regulatory technology can help here.

Check your promotions are up to scratch

Your financial promotions play a key role in managing and meeting customer expectations.


If you’re concerned about your potential exposure to FCA enforcement action around financial promotions, our specialist team can help. We can undertake a thorough review of your activities, your systems and controls, governance and due diligence arrangements, and your financial promotions.


We can then recommend whether and how you may need to adjust your approach to answer current regulatory concerns. This could involve updating the way you handle risk disclosures and financial projections in future promotions – or perhaps seeking authorisation, either in your own right or as an appointed representative.


Get in touch today by using the contact form on the right, by emailing info@LSCPROM.co.uk