The FCA has one strategic objective which is to ensure that relevant markets within the UK’s financial service markets function well. Claims management is one of the markets within the UK’s regulated financial services. The FCA has three operational objectives to achieve its strategic objective. These are as follows:
- Protecting consumers;
- Ensuring market integrity (i.e. ensuring that consumers can have confidence in the UK financial services); and
- Promoting effective competition in the interest of consumers.
Consumers are placed at the centre of the FCA’s regulatory regime and their treatment is at the core of the FCA’s purpose for existence. The FCA advances its strategic objective by making rules and guidance that prescribe and illustrate how Firms can conduct their regulated activities. As rules and guidance cannot cover every scenario the FCA has set out high-level principles that set out the standard of conduct that is expected of regulated Firms. These high-level principles are tools used by the FCA to advance its operational objectives. In contrast to rules and guidance, the FCA’s Principles for Businesses are broadly drafted to cover a wider range of scenarios.
The FCA embodies its consumer protection strategic objective in Principle 6 of its Principles for Businesses which sets out that “A Firm must pay due regard to the interests of its customers and treat them fairly.” (TCF)
The TCF principle is aimed at achieving the following outcomes for consumers:
- Outcome 1: Consumers can be confident they are dealing with Firms where TCF is central to the corporate culture.
- Outcome 2: Products and services marketed and sold to consumers are designed to meet the needs of identified consumer groups and targeted accordingly.
- Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
- Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
- Outcome 5: Consumers are provided with products that perform as Firms have led them to expect and the associated service is both of an acceptable standard and as they have been led to expect.
- Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by Firms to change product, switch provider, submit a claim or make a complaint.
The Firm ensures that it achieves outcome 1 by providing TCF training to all members of staff upon induction and on a refresher basis annually. The Firm will collect the following TCF focused Management Information (MI):
- Number of complaints;
- Category of complaints (i.e. customer service, product/service performance etc.);
- Complaints trends;
- Complaints acknowledgement timescales;
- Complaints resolution details; and
- Complaints resolution timescales.
Training and competence
- Staff TCF training completion;
- Staff TCF assessment results;
- Complaints relating to individual members of staff;
- Results of quality assurance checks; and
- TCF related disciplinary actions.
- TCF relevant findings from internal audits;
- Remedial actions following internal audits; and
- Findings from post-remedial monitoring.
- TCF relevant findings from external audits;
- Remedial actions following external audits; and
- Findings from post-remedial monitoring.
- Complaints data relating to outsourced service providers; and
- Findings from periodic internet searches on outsourced service providers; and
- Findings from audits of outsourced service providers.
- TCF relevant management meeting minutes from previous meetings; and
- Follow up on action points.
The above MI will be collected for discussion and analysis at monthly management meetings.
The Firm ensures that it achieves outcome 2 by providing industry standard services and following accepted market conduct. The Firm’s management team will continually liaise with other Firms that provide similar services to ensure that the Firm’s practices are consistent with up to date market conduct.
The Firm ensures that it achieves outcome 3 by subjecting all financial promotions to a compliance review and sign-off prior to communication. Client facing documentation will be subject to review and sign-off prior to communication. The Firm will provide sales staff with approved call scripts to guide the information that is provided to consumers. The Firm will monitor sales calls to ensure compliance to the call script. The Firm will monitor customer service calls to ensure that communication with customers are clear, fair and not misleading. The Firm will provide all relevant staff with training on call scripts and interaction with customers.
The Firm ensures that it achieves outcome 4 by providing all relevant client facing staff that provide advice to clients with technical and soft skills training upon induction. The Firm will subject staff that provide advice to clients to a ‘route to competence’ programme where they will need to be signed-off prior to having unsupervised interactions with customers. The Firm will review the call recordings and written advice that staff give customers on an ongoing basis. The Firm will collect and review MI relating to the outcome of claims to assess the suitability of the advice provided to customers.
The Firm ensure that it achieves outcome 5 by collecting and reviewing MI relating to customer complaints and the outcome of claims.
The Firm ensure that it achieves outcome 6 by providing customer service staff with TCF training and monitoring customer service interactions with customers. The Firm will provide all customer facing staff with complaints handling training to be able to identify, record and escalate customer complaints. The firm will collect and review complaints MI and monitor the quality of its complaints handling.
The Firm will conduct a review of this policy on an annual basis, or sooner, if triggered by internal changes (e.g. business process changes) or external changes (e.g. changes in law).