On Aug. 15, FCA issued complaints handling review, RCA case study.
- FCA published findings of its review of how non-deposit taking mortgage lenders
(NDTMLs), and mortgage third-party administrators (MTPAs) handle complaints.
- Examined how firms treat customers; if complaint handling arrangements pose
potential consumer harm; what, if anything, can do to handle complaints better.
- Published understanding complaints root cause analysis hypothetical case study.
Poor Root Cause Analysis
- Found management information (MI) including poor root cause analysis (RCA).
- Not always clear how firms use MI to deal with underlying reason for complaint.
- Complaints not identified and recorded consistently, not recording a root cause.
- Found that senior management and board reports often only contain operational
data and not details on symptoms of complaints, root cause, preventive actions.
- No details on customer experiences, outcomes or quality of complaints handling.
Tick Box Compliance
- Review found tick-box compliance is resulting in inflexible complaints handling.
- Some firms approach, they are not fully appreciating the effect on customers.
- Can drive complaints operations in ways which not in customers’ best interests.
- Concluded that in some firms there is an over reliance on policy and processes.
- Can limit staff ability to exercise judgement, lead to potential harm to customer.
- E.g. financially vulnerable customer asked to contact their own bank to resolve
an issue, as quicker. Didn’t adequately consider impact on vulnerable customer.
Handling Complaints Better
- Some firms not effectively applying lessons learned from FOS determinations.
- Review FOS decisions, technical guidance if changing policies and procedures.
- Ensure MI firm collects and analyzes is accurate and relevant to its operations.
- Have robust RCA capability to identify and remedy recurring systemic problem.
- Appropriate governance, processes to ensure RCA provides strategic purpose.
- Effective, transparent procedure for reasonable, prompt handling of complaint.
- Reduce risk of over reliance on policy, procedure. Consider, for each complaint,
if customer outcome and experience shows firm put customer's interests first.
- Firm should make sure it assesses complaint fairly, consistently and promptly.
- Internal systems, controls allow staff to identify, record a complaint correctly.
- Process to ensure FCA annual, or biannual, complaints return data is accurate.
- Helps firms to distinguish between symptom and the root cause of a complaint.
- What complaint RCA looks like, not sector specific, any regulated firm may use.