How Are FCA Complaints Reporting Rules Changing in 2027?
On the first of January 2027, new requirements for complaints reporting will come into effect, with the addition of two new data fields in the complaints return relating to vulnerability. These new reporting requirements are:
1. Complaints Made by Vulnerable Customers
Businesses will need to report the total number of complaints received from customers who have been identified as vulnerable. This is not limited to complaints directly involving their vulnerability, it covers any complaint made by a vulnerable customer. This includes customers who have directly disclosed a vulnerability and customers who the business have identified as vulnerable, whether through direct customer contact or via other information.
2. Complaints Relating to the Firm Failing to Consider/Respond to Vulnerability
Organisations will additionally need to catalogue complaints which specifically relate to failures in vulnerability support. This could mean the business failed to identify a customer as vulnerable, the business acted in a way that did not consider a customer’s identified vulnerability or a business neglecting to respond appropriately to a vulnerable customer’s personal situation.
Why is the FCA making these changes to complaints reporting requirements?
The regulator’s goal is to utilise this information, alongside the rest of an organisation’s complaints data, to track what percentage of complainants are vulnerable and if vulnerable customers are experiencing a disproportionate amount of difficulties. It will also help the FCA to see how often businesses are failing to identify vulnerability and if they are delivering the necessary support where vulnerability is identified, as well as contributing to Consumer Duty outcomes monitoring.
How can your business prepare for the new requirements?
With less than 5 months to get ready, businesses should begin looking at their complaints recording process now. Does your current approach capture the data you’re going to need come January? Remember that you will need to record more than just “is the customer in the complaint vulnerable” – you need to know if the vulnerability was relevant to the complaint and if the organisation’s response to the vulnerability led the complaint.
We would recommend businesses look at any gaps in what’s currently recorded vs what’s needed now, to give themselves plenty of time to implement the change. There may also be a need for training and updating policies so complaint handlers are consistent in their identification of vulnerability and accurate in their assessment of whether that vulnerability is relevant to the complaint.
Firms should not see this as a box-checking exercise to fulfil a requirement. Having better, richer data about customers and complaints can only help to build a better understanding of where a business is and isn’t working which in turn can drive improvements.
If you’re concerned about your own organisation’s preparations for the new rules, Kind Consultancy can help. We work with a number of expert Regulatory Change consultants who are perfectly positioned to assist firms in the assessment, transformation and embedding necessary to ensure your business is ready before January 1st.
For a confidential conversation, contact us on 01216432100 or via info@kindconsultancy.com and to read the full Policy State (PS25/19) covering these changes, head to the FCA website.
