FSA takes action against banks

The Financial Services Authority (FSA) is taking action against five banks after finding weaknesses in their handling of customer complaints.

According to the regulator, all of the banks are now undertaking major changes to the way they deal with complaints and two of them have been referred to enforcement for further investigation.

It follows a review carried out by the organisation into FSA compliance concerning several banking groups responsible for over 70 per cent of the complaints firms receive and report to the FSA and over 60 per cent of those resolved by the Financial Ombudsman Service (FOS).

According to the regulator, it found poor standards of complaint handling within most of the banks assessed, including a lack of senior management engagement and accountability, poorly designed staff incentive schemes, and poor quality complaint handling by staff in branches.

In addition, the review identified complaint handling procedures which led to staff issuing multiple, repetitive responses to customers and noted the failure of banks to learn from previous complaints and to make changes to prevent recurrences.