Updates from the Financial Conduct Authority

Ursula Toner, Legal Advice Services & Support Manager with Housing Rights Service, highlights some important announcements from the Financial Conduct Authority (FCA). 

Fines for Yorkshire Building Society

The FCA has fined Yorkshire Building Society (YBS) £4,135,600 for failings in dealing with customers in mortgage arrears. These failures led to significant delays in determining the most appropriate payment solutions. YBS properly viewed repossession as a last resort but failed to recognise that delays in reaching long term payment solutions meant that some customers incurred increased fees and associated interest. YBS has already started to refund these customers

New Requirements for Credit brokers

From 2 Jan 2015 FCA implemented new rules to ban credit brokers from charging fees to customers, and from requesting customers’ payment details unless they comply with new requirements.

People using payday lenders and other providers of high-cost short-term credit will see the cost of borrowing fall and will never have to pay back more than double what they originally borrowed, the FCA confirmed.

FCA Consultations

The FCA is currently seeking responses to consulation on complaint handling by lenders.

Recommendations so far include that firms

• have a dedicated complaint telephone lines should not use numbers that charge consumers more than a ‘basic rate’ (including mobile users)
• reconsider the definition of complaint (e.g. removing the more subjective element of ‘material’ distress or ‘material’ inconvenience)
• extend the time-frame of the ‘next business day’ rule (e.g. extend to one week)
• consider whether their complaint-handling policies and processes fully consider whether their approach to complaints have the interests of consumers at their heart; avoiding a tick-box approach to compliance with FCA rules

The closing date is March 2015.