FCA publishes new rules on complaint handling

Banks should alert customers to changes to interest rates or the maturity of a fixed-term account, the Financial Conduct Authority (FCA) said.

The ban – which comes into force on 26 October – is part of a raft of new measures being ushered in by The Financial Conduct Authority in a bid to make the complaints process fairer and more thorough.

“Getting this right is also vital for firms”.

If a complaint is resolved during this three day period, firms will be required to send their customers a simpler, template message informing them of their right to take their complaint to the Financial Ombudsman Service, it said.

In January 2015 the regulator published the final findings of its savings market study, in which it found that banks and building societies “need to improve the transparency of their practices, with little information now being given to consumers about alternative products”.

“In a good market, providers should be competing to offer the best possible deal”, said Christopher Woolard, director at the FCA. “We will look at these suggestions from the FCA with great interest”.

The revised rules limit the cost of calls consumers make to firms, including all post-contractual calls and all complaints calls, to a maximum “basic rate”. Consumers should expect the information they need to shop around to be clear and easy to understand.

The FCA wants feedback on the proposals and is expected to confirm finalised rules later this year, with a view to the rules to coming into force in 2016. When they wish to move accounts, they should be able to do so with the minimum of fuss.

Richard Lloyd, executive director of consumer group Which?, described the plans as “a significant win for savers”.

Communications from savings providers may in future have to include a “switching box” providing key account information to prompt customers to see if they can get a better deal elsewhere.

‘Providers should have been doing these basics as a matter of course and it shouldn’t have needed the regulator to step in, ‘ he said. More than five years of the Bank of England’s base rate at a record low has fostered a low interest rate environment and that has not been easy for many customers to bear.

The City watchdog will even “name and shame” those firms paying poor interest rates to long-standing customers.

“We’re now working to deliver seven-day switching for the vast majority of cash Isa transfers”.

The industry has largely welcomed the proposals, as they’re “clearly for the benefit of savers”, said Rachel Springall, finance expert at Moneyfacts.co.uk.

“For too long providers have increased profitability to the detriment of customers as their cash sits in accounts offering miserly returns”, said Andrew Hagger, of Moneycomms, who described the plans as “long overdue”.