By Charlotte Clark, Director of cross-cutting policy and strategy, FCA
We’re delivering change at speed by acting now within our current powers, with a focus on improving how the system works in practice. This includes a new registration stage for complaints, updated dismissal grounds and clearer guidance on the fair and reasonable test.
Throughout, our aim has been to improve alignment, predictability and early engagement across the system – while maintaining strong and effective consumer protection.
Better for consumers
For consumers, this means a smoother and more effective journey when problems arise, with complaints handled promptly by their financial services firm, and fair and fast compensation where it’s due.
Strong consumer protection is not just about rights on paper, but about how well the system delivers for people when they need it most. A system that enables earlier identification of harm, better coordination and clearer expectations should help reduce unnecessary delay and uncertainty for consumers, and support more consistent outcomes.
Consumer stakeholders told us that harm can grow quickly when issues affecting many customers are not spotted early enough. In response, we’ve changed how we assess potential harm in the round. This includes also considering the number and makeup of firms across a market or multiple markets that are affected, rather than relying solely on the number of consumers impacted. This will further support earlier identification of issues and more timely regulatory action.
Firms’ responsibilities to handle complaints fairly and promptly remain unchanged, and the Financial Ombudsman will continue to operate independently, making decisions that are fair and reasonable in individual cases. The focus is on improving how the system functions day-to-day, so that it delivers better outcomes more regularly.
Better for firms
For firms, greater alignment between the FCA and the Financial Ombudsman, alongside clearer routes for early engagement when issues arise, should provide more confidence and predictability. Our changes will help firms understand when to escalate issues, what information is needed, and how wider redress concerns are likely to be approached – supporting better decision making and earlier action. Greater clarity about our expectations, coupled with more predictability of how issues will be handled, will help firms invest, grow and compete.
We’ll continue to work at pace across the whole of the regulatory system to support the Government’s broader reformsLink is external. But by strengthening cooperation, encouraging earlier resolution and improving transparency now, we’re creating a redress framework that is fairer, more proportionate and effective – one that works better for consumers, provides greater certainty for firms, and builds confidence and trust in UK financial services.
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