Complaints Against the Regulators – The Bank of England, the FCA, and the PRA
Friday 5 January 2024
The Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Bank of England (BoE) have published their final policy statement PS10/23 – Complaints against the regulators (the Bank of England, the FCA and the PRA), following previous consultation in 2020. The publication was delayed to allow for 3 Independent Reviews to be published and the enactment of the Financial Services and Markets Act 2023 to allow for changes to be fit for purpose.
The FCA, PRA and BoE have a join Complaints Scheme under the Financial Services Act 2012 (the Act). The scheme covers the complaints procedures of the Regulators, and also the role of the independent Financial Regulators Complaints Commissioner (the Complaints Commissioner).The new scheme sets out to provide clarity and transparency around what people can expect when they complain, making it more user-friendly. The purposes of the scheme are to provide a means to hold the Regulators to account and to use the complaints it receives as a tool to improve their practices, policies, or procedures to avoid the same problem occurring again.
The new scheme will apply from the 1st November 2023. Any complaints made prior to this date will be under the existing scheme.
Changes to be implemented
Compensatory Payments
The policy statement details the removal of the £10,000 limit for compensatory payment in recognition of a complainant’s financial loss, however in practice the regulators still expect payments to be modest.
For financial loss compensatory payments, the regulators are maintaining the two conditions set out in the consultation paper:
- That the Regulator is the sole or primary cause of loss, and
- There has been a clear and significant failure by the Regulators.
For non-financial loss compensatory payments the explanation of how payments will be determined has been expanded by describing what would fall into each payment level. The payment levels have also been amended to better reflect the range of payments the Regulators could make under the scheme. The updated table can be found below:
| Level | Range | Impact |
| 1 | Up to £100 | Your complaint may fall into this category if we consider that you have experienced a relatively low level of distress or inconvenience as a result of our actions or inactions. This might typically arise from a one-off incident or occurrence such as a small administrative error, or where the impact on you is of short duration. Avoidable complaint handling delays of up to 10 months will fall into this category |
| 2 | £101 – £500 | Your complaint may fall into this category if we consider that you have experienced a moderate level of distress or inconvenience as a result of our actions or inactions. This might typically arise from multiple small incidents, or a single, relatively significant incident, where the impact on you was of moderate duration. Avoidable complaint handling delays over 10 months will fall into this category. |
| 3 | £501 – £1,000 | Your complaint may fall into this category if we consider that you have experienced a high level of distress or inconvenience as a result of our actions or inactions. This might typically arise from a series of relatively significant failures in our processes, or an unreasonable and prolonged delay on our part, where the impact on you was of a lengthy duration. |
| 4 | £1,001 – £2,500 | Your complaint may fall into this category if we consider that you have experienced a very high level of distress or inconvenience as a result of our actions or inactions. This might typically arise from a major failure in our processes or an unreasonable, prolonged, and continuing delay on our part, where the impact on you was of a very lengthy duration with lasting effects. |
| 5 | Over £2,500 | Your complaint may fall into this category if there are exceptional circumstances, such as where our failings or the consequences for you are unusually severe. |
The changes are intended to provide greater transparency on how such compensatory payments for non-financial loss are determined. The payment levels are intended as guidance and any actual payments will be made following consideration of the circumstances of the individual complainant.
Where appropriate, a compensatory payment for non-financial loss could be paid in addition to a payment for financial loss.
If a complainant is dissatisfied with the outcome of their complaint, they may ask the Complaints Commissioner to review their case.
The Regulators will review the compensatory payment levels for non-financial loss every 2 years.
Discretionary compensatory payments in recognition of financial loss will only be paid where adequate documentary evidence of the loss has been provided, and the following conditions have been met:
- There has been a clear and significant failure by the regulator; and
- The regulator is the sole or primary cause of the loss.
In light of legislative change, the Financial Services and Markets Act 2023 sets out that Treasury will appoint the Complaints Commissioner, these amendments have been made to Annex D of the Scheme.
What Complaints can the Regulators Investigate?
| Regulator | Complaints must relate to: |
| FCA or PRA |
|
| Bank of England |
|
Complaints about legislative functions – such as tule-making and guidance/statement-issuing – cannot be investigated under the Scheme as they are excluded.
The types of complaints the Regulators can investigate under the Scheme, include allegations of:
- Mistake;
- Lack of care;
- Unreasonable delay;
- Unprofessional behaviour;
- Bias; or
- Lack of integrity