FSB publishes TCF Complaints Management

Pretoria - The Financial Services Board has published a Discussion Document (the TCF Complaints Management Discussion Document), setting out proposed requirements for customer complaints management by regulated financial institutions, aligned to the Treating Customers Fairly (TCF) framework.

One of the key outcomes of the TCF framework is that "; Customers do not face unreasonable post-sale barriers imposed by firms to change product, switch providers, submit a claim or make a complaint" (TCF Outcome 6); To demonstrate commitment to TCF Outcome 6, it would be necessary for any firm to develop-implement, monitor and internally report on an appropriate and effective internal process to manage customer complaints.

In addition, firms are expected to use customer complaint information as an important source of management information to measure their delivery of the full set of TCF Outcomes. To confirm these regulatory expectations, the regulatory framework should set consistent obligations for all firms to develop and implement complaints management processes, and set consistent standards which those processes should meet.

The current financial services regulatory framework in relation to complaints management is inconsistent, with different levels of responsibility placed on different types of entities. The discussion document invites comment on a proposal for a more consistent and comprehensive regulatory framework to support the delivery of the complaints related aspect of Outcome 6, across different types of financial institutions. Main features of the proposal are:

Consistent new regulatory definitions of "complaint" and related terms"Complaint" is to be broadly defined, to include - with some limitations - expressions of dissatisfaction relating to products or services offered or provided by financial institutions, including a complaint; of unfair treatment:

Standards and requirements for financial institutions to implement internal complaints management processes, including record keeping, monitoring and analysis of complaints.

Requirements for categorisation of complaints, aligned to the desired TCF outcomes to enable institutions and the regulator to better monitor the risks of different forms of unfair treatment.

Requirements in relation to the engagement between financial institutions and Ombud schemes.

Requirements for reporting complaints information to the regulator.

The discussion document also explains how these new requirements are intended to be built into the existing FSB regulatory framework. This proposal is the outcome of a series of consultations, going back to February 2013, with the multi-stakeholder TCF Regulatory Framework Steering Committee; International standards and practices in relation to complaints management were also reviewed.