FINAL REPORT ON COMPLAINT GE-L0035

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FINAL REPORT ON COMPLAINT GE-L0035 Powered By Docstoc
					On 25 March 2003, the Complaints Commissioner issued a final report on complaint
GE-L0035 to the complainant and the Financial Services Authority. The introduction
and summary to that report is published below.




             FINAL REPORT ON COMPLAINT GE-L0035


1.     Introduction and Summary

1.1    This is the Final Report of an investigation by the Complaints Commissioner
       of complaint reference number GE-L0035 against the FSA. The complaint
       falls to be considered under the Main Scheme. A Preliminary Report was
       sent to the complainant and to the FSA on 28 February 2003 and 15 working
       days were given for submissions to be made to the Commissioner thereon.
       Submissions were received from the FSA, but not from the complainant. The
       comments made in this submission have been carefully considered by the
       Commissioner in preparing this Final Report.

1.2    The complaint concerns the FSA’s handling of two requests to the FSA by an
       investor with Providian National Bank. The complainant enquired about the
       Bank’s financial stability and, shortly afterwards, he asked for the FSA’s
       assistance in withdrawing his funds.

1.3    The complaint concerns four matters:

       (a)    the complainant’s original enquiry concerning Providian’s financial
              stability;

       (b)    the complainant’s request for assistance in withdrawing his funds;

       (c)    the handling of communications between the complainant and the
              FSA; and

       (d)    recognition by the FSA that a complaint had been made, and the
              handling of the complaint.

1.4    In relation to the first matter, the Commissioner finds as follows.

       (a)    It is now a matter of public knowledge that the FSA was concerned in
              late 2001 about the position of UK depositors with the UK branch of
              Providian National Bank. Events were described in the FSA’s Annual
              Report for 2001/2. At the time, however, the FSA were constrained in
              what they were able to tell individual Providian depositors. The
              Financial Services and Markets Act imposes restrictions on what the
              FSA may divulge to third parties about its dealings with individual
             firms. The FSA, however, worked with Providian senior management
             and US regulators to ensure that UK customers were alerted to the
             risk, and were able to choose whether or not to withdraw their
             deposits. The funds of all retail depositors were ultimately repaid.

      (b)    The FSA Supervisory Team prepared briefing material in the form of
             Questions and Answers to enable Helpline staff to deal with enquiries
             from Providian depositors. In addressing the complainant’s enquiries,
             made between 12 December and 19 December 2001, regarding the
             financial stability of Providian, however, it appears that the FSA went
             further than they did for other Providian enquirers. The FSA’s objective
             was to draft an individual written reply to the complainant, which he
             had asked for, and they started a process for doing this, involving the
             Supervision Team and other relevant departments. But there is no
             record of a letter being sent and no evidence, over and above the
             reported recollections of two people, that a final draft was actually
             produced.

      (c)    Overall, the Commissioner finds that there was no obligation on the
             FSA to produce an individual reply; the standard material would have
             constituted a satisfactory response. Having embarked upon the
             laudable strategy of producing an individual tailored reply, however,
             this strategy should have been carried through to its conclusion. The
             Commissioner finds that an error was made in not keeping a copy of
             any letter prepared and, apparently, not sending the letter or, if it was
             sent, not maintaining a record of the means by which it was sent. In
             this one respect, this element of the complaint is made out. The
             Commissioner notes, however, that the FSA have already offered an
             apology for this error.

1.5   In relation to the second matter, the Commissioner finds as follows.

      (a)    The complainant told the FSA that he was experiencing a problem in
             withdrawing his deposit with Providian and asked for their assistance.
             The FSA is not required to intervene in an individual case where a
             customer has a problem in making a withdrawal. Nevertheless, in this
             case the FSA chose to mention the matter to Providian’s
             management; in the Commissioner’s view, this went above and
             beyond what was strictly required. Furthermore, it transpired that this
             problem was in part of the complainant’s own making in that he had
             not signed his withdrawal form. The Commissioner understands that
             the withdrawal went through shortly after the FSA’s intervention, and
             to this extent the intervention may well have benefited the
             complainant. The FSA did not tell the complainant about their action;
             there was no requirement for them to do so. Nevertheless, the FSA
             have apologised for not informing him.

      (b)    Overall, the Complaints Commissioner finds that this element of the
             complaint is not made out. The apology already offered by the FSA is
             thus not strictly warranted, but should have fully satisfied the
             complainant.
1.6   In relation to the third matter, the Commissioner finds as follows.

      (a)    In the Commissioner’s view, it is acceptable for the FSA to produce
             information in a Question and Answer format to enable sensitive
             queries to be answered in a consistent and efficient manner by the
             Helpline. The Commissioner finds, however, that communications in
             this particular case, where the FSA was attempting to provide a higher
             level of service, were made more difficult by the way in which the
             FSA’s departments dealing with customers were organised at that
             time. The complainant’s telephone calls were received by the Helpline.
             The Helpline was at that time organisationally separate from the
             Correspondence Unit, which dealt with letters and faxes, including
             those sent by the complainant. The Helpline had no facility for
             keeping hard copies, yet had lead responsibility for sending a letter or
             fax to the complainant. The Helpline used an electronic system for
             logging calls and storing e-mails, which was not linked to the system
             used by the Correspondence Unit for recording faxes and letters. The
             complainant made various telephone calls to the Helpline and sent
             and resent several faxes. He was asking for a response in writing, but
             the officer responsible for producing the FSA’s reply to him was
             located in a department that did not deal with letters or faxes. The
             scope for confusion to arise was therefore considerable.

      (b)    The Commissioner notes, however, that having investigated their role
             in the handling of this complaint, the Helpline management has made
             an arrangement whereby the Correspondence Unit provides a facility
             to record and store copies of letters and faxes sent by the Helpline.
             More recently, the Helpline and Correspondence Unit have been
             merged and are now managed as a unified department.

      (c)    Overall, the Commissioner finds that this element of the complaint has
             been made out insofar as some aspects of the communication
             between the FSA and the complainant are concerned but that,
             otherwise, the FSA responded with reasonable promptness to the
             complainant. However, the Commissioner notes that in their letter of
             20 March the FSA offered a general apology to the complainant in
             respect of any areas where they might have handled his enquiry
             better.

1.7   In relation to the fourth matter, the Commissioner finds as follows.

      (a)    The complainant was, during a telephone conversation on 19
             December, wrongly advised by the FSA as to how he might make a
             complaint, and the oral complaint he made at that time was not
             passed to the Company Secretariat as the Scheme envisages. But
             when the complainant made his formal complaint in writing to the
             Company Secretariat it was, thereafter, properly handled in
             accordance with the terms of the Complaints Scheme.

1.8   In the light of these findings the Complaints Commissioner recommends as
      follows:

      (a)    The FSA should provide an apology to the complainant for wrongly
             advising him as how he might make a complaint and for not handling
              in accordance with the Complaints Scheme procedures the complaint
              he made orally on 19 December 2001.

       (b)    Having already improved in certain respects the arrangements for
              coordinating the handling of telephone and written (e-mail, fax, and
              letter) communications, the FSA should now consider adopting a
              ‘customer management’ system to be used by all departments which
              make direct contact with customers, including the Helpline, the
              Correspondence Unit and Company Secretariat complaints staff.

       (c)    A record should be kept of any letter, fax or e-mail sent to a customer.

       (d)    The Company Secretariat staff with responsibility for the Complaints
              Scheme should work with the management of the Consumer Division
              to ensure that all staff dealing directly with enquiries:

              (i)     are aware of the procedures for referring complaints to the
                      Company Secretariat;

              (ii)    understand the role of the Complaints Commissioner; and

              (iii)   are given guidelines as to the point at which a customer’s
                      dissatisfaction should be recognised as a complaint and dealt
                      with under the complaints procedures.

1.9    The Commissioner understands that the FSA is now addressing, and in some
respects has already addressed, the matters highlighted in paragraphs 1.8(b) to (d)
above.