Consumer credit – Ongoing service and end of agreement

We want to help firms understand what they are required to do under our rules and what our expectations are of them. On this page, we outline why your commitment to customers does not end after they enter into an agreement with you.

Ongoing service and end of agreement

In the final video in our consumer credit series, we outline why your commitment to customers does not end after they enter into an agreement with you.

Your commitment to customers should not end after they enter into an agreement with you. It should continue for as long as the product or service lasts and, in the case of complaints covered by the Financial Ombudsman Service, often far longer.

In practical terms, treating customers fairly means ensuring that the product or service works as intended over its lifetime. For lenders, this can mean taking steps to identify customers who begin to show signs of financial difficulty and acting appropriately. It also means treating customers who fall into arrears or default with patience and consideration. For brokers, it may mean refunding any fees paid (of more than £5) if a credit agreement isn’t entered into.

All firms need to ensure that information you held on customers is kept safe in line with data protection requirements. This means having adequate cyber and technology resilience. View more information on our expectations in this area.

An important way for firms to identify and correct any mistakes in the treatment of customers is by effective complaints handling. Firms’ attitudes to complaints are a strong indicator of their culture and whether they have customers at the heart of their business.

In September 2017, we published a letter aimed at all to CEOs of firms that engage in consumer credit activities which highlighted a number of failings in complaints handling and the actions we expected them to take.

It is important that all customer facing staff know how to identify a complaint and that once identified it is handled correctly. This includes the speed of responses and updates, the clarity of the outcome and the customer’s ability to refer the complaint to the Financial Ombudsman Service if they are unhappy.

Effective complaints handling is also an important way to identify and address common systemic issues that your firm may have. Undertaking root cause analysis of complaints can help a firm to understand the underlying issues within their systems, controls or practices and allow them to be rectified. Firms can learn a lot about how well business is conducted from the cause and outcome of complaints and we expect firms to have procedures in place to enable this DISP 1.3.2(a) G. We published a case study to help firms understand complaints root cause analysis and to distinguish between the symptoms of a complaint and the root cause of it.

We recognise that how firms approach complaints handling and compliance with our SYSC and DISP rules will vary depending on their size and resources. However, having effective controls and maintaining adequate management information (MI) is always key to ensuring good outcomes for customers. Adequate MI assists with complaints handling and provides senior management with the right information to assess whether the firm is delivering the right outcomes for customers. It also helps a firm to assess if its products or services are operating in the way they are intended to. View more information including a guide on MI and treating customers fairly.