How will FCA's sweeping changes to complaint handling rules effect you and what are your options?

FCA’s recently published policy statement ps15-19 titled ‘Improving complaints handling, feedback on CP14/30 and final rules’ July 2015 has certainly caused a stir within the insurance and financial services sector.

In this policy statement the FCA explain their response to the feedback received on consultation CP14/30 'Improving complaints handling' (published in December 2014). The policy explains FCA’s new rules on complaints handling for financial services firms. The rules limiting the cost of telephone calls which consumers make to firms has caused a stir, as some firms have been generating a small amount of revenue off these numbers and utilising this revenue to subsidise the cost of call centres.

In short, this new policy means that FCA regulated companies will no longer be exempt from The Consumer Rights Directive that came into force in the summer 2014. FCA regulated firms have until 26 October 2015 to ensure they comply with the policy.

What is The Consumer Rights Directive?

The Directive requires that consumers should be able to contact a company for post-sale queries or complaints via a basic rate telephone number, instead of using higher priced 084x and 087x numbers. Insurance and financial services companies were previously exempt, but the new FCA policy now states that FCA regulated companies should adhere to this EU directive.

How will this affect you?

Consumers should be able to contact companies that they have bought something from without significant extra cost. Due to of the nature of the insurance and financial services there are many post-sale calls example e.g. policy queries, updates to policies and claims calls. Many insurance and financial services firms currently use 084x and 087x numbers for customers to call, generating a small amount of revenue for companies using them. The move away from these numbers means that this revenue will now be lost and there will also be an additional cost to adopt less expensive numbers for post-sale calls.

What are your options?

Option 1:

Replace all 084x and 087x numbers with 0800 numbers. It should be noted that the cost of receiving calls on 0800 numbers has increased significantly since July 2015. Ofcom regulatory changes require all calls made to 0800 numbers to be free of charge from both fixed and mobile lines; this has resulted in an increase in cost of receiving calls on any 0800 number you advertise.

Option 2:

Switch your 084x and 087x number to a 034x or 037x equivalent number. These are non-geographic standard rate numbers that charge consumers in the same “basic rate” manner just like 01 and 02 geographic numbers. Importantly they sometimes qualify as part of mobile phone users’ free minutes. If you have 084x or 087x numbers then the equivalent 03xx numbers should be available from the original number provider to make transition as simple as possible for customers.

Option 3:

Publish different numbers for sales calls and post-sale calls. Keep original 084x and 087x number for sales calls and have a new or equivalent 034x or 037x number alongside it for post-sale and customer service calls. A recorded announcement can be played at the start of 084x and 087x calls to inform existing customers that there is an option to dial a cheaper 034x or 037x number. This is the lowest cost approach to meet the directive’s standards, without sacrificing all of the revenue from 084x and 087x numbers.

An easy way of implementing this option is to manage your numbers via the Maintel Inbound platform. A new feature has recently been introduced on the platform to support our customer’s moving from existing 08x and 09x numbers to 01, 02 or 03 number. The new feature will allow you to provide the change number announcement at no cost to you or the caller. It will assist you with message creation by providing prefix and suffix announcements. The customer will be able to terminate the call upon receiving the message and redial, alternatively they will have the option to remain on the line and be connected at the original dialled numbers ppm rate.

Combining Option 2 and Option 3 can provide a cost effective solution.

FCA regulated firms, have until 26 October 2015 to ensure they comply with the changes limiting the cost of both complaint and post-contractual calls.

Given the technical changes that may be required, Maintel recommend prompt action to review the charging structure currently in place for numbers advertised for post-contractual and complaints calls.