Financial Services Authority moves to deal with bank awards

Rising complaints against banks has caused the Financial Services Authority to makes changes pertaining to how complaints are handled and the amounts of ombudsman awards.  The FSA will seek to make a senior individual from each bank responsible for the handling of complaints and possible awards will rise from a maximum of 100,000 pounds to 150,000 pounds.

In order to provide reasonable and timely compensation for customers, the FSA will also eliminate a two-stage regulation for the processing of complaints and require banks to analyze the root cause of grievances.  The plans were announced as the FSA unveiled its collective data report on banks for the first six months of 2010.

The data showed that complaints against payment protection insurance rose 53 per cent.  In comparison to the prior six-month period, the data showed a decline in complaints resolved within eight weeks and the amount of money paid in compensation by building societies and banks jumped 43 per cent higher.

With the new regulations, the FSA is trying to force banks to make good complaints management the norm instead of the exception.  FSA officials say that complaints handling is a vital factor in their approach to monitor how banks conduct business with their customers.