The Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS) have put out a joint call for input into how they can work together to modernise the process for consumer redress.
The organisations said they have heard from stakeholders that they currently “find it challenging” to make representations to the FCA, FOS and other regulatory family members on issues that may have significant or wider implications.
“It is important to make sure that issues with wider implications are identified as early as possible,” they said in a paper published today (15 November).
“This will allow thought to be given to the most appropriate way to manage risks
and issues.
“We are keen to explore what changes we may need to make to the redress framework to better identify and manage issues, before redress events escalate.”
The paper said the current redress framework works well for individual customer complaints about specific issues.
However, it added, challenges can occur when there are large numbers of complaints about the same issue during what the regulators refer to as “mass redress events”.
“These challenges can be compounded if firms do not identify issues early or do not proactively address harm where it occurs,” it said.
The FCA and FOS said they want to “work together” with stakeholders to modernise the system to ensure a more “effective and efficient” redress framework for the future.
They also want to explore how they can co‑operate better under the current framework when carrying out their different statutory functions.
Through their call for evidence, the FCA and FOS said they want to get stakeholders’ views on how the current redress framework could be modernised and the problems that mass redress events and the redress system in general cause firms, consumers and their representatives.
They also want to gauge what changes they could make to the redress framework to enable them to better identify and manage mass redress events, and what changes could be made to how they work together to ensure their views on regulatory requirements are consistent.
Interested parties have until 30 January 2025 to put forward their views.
