The Consumer Duty one year on: full speech from Abby Thomas

Our role is to provide a free and easy-to-use service, that resolves complaints between consumers and SMEs, and businesses that provide financial services – across the banking, insurance, consumer credit, pensions and investments sectors and more.

Our purpose has never changed:  to resolve individual complaints based on what we think is fair and reasonable in all the circumstances of the case. This has remained our focus, both before and after the Duty came into force.

Our vision is to ensure that every customer – whether they are a complainant, or a business customer – receives either a better outcome, or is better informed, as a result of using our service.

Over the last two years, we have restructured our teams. Every member of our Casework team is now aligned to an industry sector, or is supporting the implementation of cross-cutting policy initiatives – including, of course, the Consumer Duty. 

 We have also harnessed the power of digital – from transforming the experience of a consumer raising a complaint on our website, to categorising complaints based on the issues raised, and automatically allocating cases to suitably skilled team members – as well as to provide performance data to support our team’s continuous improvement.

Over the last two financial years, I’m proud to say our quality scores have improved, and the average time it has taken us to resolve a case has more than halved. This not only helps our customers move on more quickly from the issue, but it also means firms receive more timely feedback and insight from the complaints we see.

We’ve shared this insight with the FCA, having worked with them – as well as with firms and consumer groups – to support the implementation of the Consumer Duty. Together, we’ve attended events to promote understanding of the Duty. We share insight in our day to day working. We also co-operate through the Wider Implications Framework, which provides a structure for us to work together where we see issues.

The FCA has already said that one of the ways it will evaluate the success of the Duty is through complaints data. 

And the Duty says that firms should monitor the quality of their customer service and support by actively looking for evidence – such as complaints – of where they’re falling short.

My team resolved almost 200,000 complaints last year.

We have a birds’ eye view of the financial services sector – what works, and according to your customers, what doesn’t. We are committed to sharing this insight for the benefit of all. We’re doing this in the answers we’ve given in individual cases, and in our regular engagement with firms – highlighting examples where we think firms may need to do more to meet the higher standards of the Duty.  

So, what can I share with you today about the complaints we’re seeing?

A year in, we’re routinely receiving complaints about things that have happened since the Duty’s been in force.  

Regulatory rules are one of our considerations in deciding cases, and the requirements of the Duty have had an impact on what’s fair and reasonable in the individual circumstances of each case.  

Take complaints about a customer’s understanding of a product or service, for example.

The Duty requires firms to communicate well with their customers and to ensure communications are likely to be understood so that they can make timely, properly informed decisions about products and services. We receive complaints from consumers about the information they received from a firm – that it wasn’t clear, caused confusion, or it came at the wrong time. Sometimes firms respond by pointing to their terms and conditions – or information provided when a customer first took out a product. 

Take this example.

A bank emailed a customer to let them know the interest rate on their savings account was increasing. The email was addressed directly and referred to the customer’s type of savings account. When the customer checked online and saw the rate hadn't changed, they thought there was a mistake and contacted the bank. For three weeks, the customer’s query was passed to different people in various teams, but no one seemed to understand what had happened and some of the information conflicted.

It was only after complaining that the customer received an explanation. The increase didn’t apply because of the balance held in the account. However, the customer felt they had spent a lot of time chasing for was a simple answer.   

There is a real benefit to firms themselves when they actively consider the root cause of complaints. In this case, the firm too would have benefited from being clearer upfront.

When you hear from customers who have not fully understood the rules or terms – it's a prompt to revisit how you’re describing your products to customers and at which points on that journey your customer needs contact, reassurance or a reminder. 

Overall, poor administration and customer service continues to be one of the biggest areas of complaint, including issues of poor service, lack of timely support or broken promises.

For example, a customer asked his credit card provider to contact him in writing only, because it helped him manage, and to get support when needed, at a distressing time in his life. His credit card provider agreed to this, but then continued to call. After repeating his request, explaining his circumstances and the agreement again, several times – even though details had been recorded by the firm – the customer eventually complained to get the calls to stop. 

In this case, had the customer’s needs been taken into account, the firm would have been able to resolve the issue more quickly, benefiting themselves as well as the customer.  

Since the Duty has been in force, we’ve continued to see complaints where customers have said a firm hasn’t considered or met their individual needs. 

The Duty puts a strong emphasis on delivering support to meet the needs of vulnerable customers – building on existing guidance for firms and obligations under the Equality Act. But sometimes we receive cases where businesses have stuck rigidly to their standard processes – even when the situation is far from standard.  

A customer had a health condition which meant travelling to a branch would be difficult. The bank insisted that they still attend a branch to carry out a transaction. Despite the customer sharing information about their circumstances, there was no offer, explanation or consideration of an alternative. 

Firms can’t always immediately make the adjustment the customer has originally asked for. But in the best examples we see – rather than focusing on what it can’t do and trying to justify it – the firm focuses on finding a solution to help the customer.

The way a firm responds when a customer asks for an adjustment or additional support is crucial to make sure that they don’t face unreasonable barriers to communicating about, or accessing, a product or account. But we still see cases where firms have been more focused on closing the complaint than supporting the customer or understanding the origin of the concern or issue.

Your teams should understand their role in delivering the Consumer Duty, and the true value of a culture of good complaints handling.

By taking the time to listen and understand a customer’s concerns, they get a better picture of how a problem has impacted that customer. By looking at quantitative data, they can establish where problems are occurring, and where the opportunities for improvement exist.

Good complaint handling can repair a relationship, help build trust and confidence in financial services, and give customers a better understanding of what’s happened, helping to resolve a case in the truest sense of the word.  

As a final thought, I’d like to ask you to think about your own firms’ complaint handling by considering a couple of questions.

Do you treat your customers as you would expect to be treated in their circumstances?

And, how can you use the complaints insight we share with you directly, and the information we publish more generally, to:

1. • proactively address issues?
   • take action to rectify any harm, including paying any compensation promptly?
   • demonstrate your firm’s progress in embedding the Duty at every level of your organisation?

We want to help firms remove the need to complain, or respond to complaints well themselves, without the need for a case to come to us.

I’m passionate about the role we can play in this – and I look forward to working with you all on the next stage of the Consumer Duty.