The regulator of the UK financial services industry, the Financial Services Authority (FSA), has revealed plans to name and shame financial firms that receive high levels of complaints in an attempt to improve the way firms handle customer grievances.

Small financial firms, such as independent financial advisers, should not be affected by the FSA plans.  This is because the FSA only wants firms that receive more than 500 complaints every six months to publish details about them on their websites twice a year.

The information provided by financial firms on their websites would be a snapshot of the number of complaints received during the past six months, how many were dealt with within eight weeks of receipt, and what percentage were upheld.  In order to assist consumers put the figures into perspective and to compare one firm to another, firms would have to detail how many complaints they received per thousand customers.

In addition to each financial firm putting the figures on their own websites, the FSA intends to publish the information on its own website every six months to provide further guidance for consumers.  The information will be broken down into five product areas: banking, home finance, general insurance and pure protection, life and pensions, and investments.

The theory behind publishing this complaint data is that firms should improve their in-house complaint handling procedures in order to avoid the ‘wooden spoon’.  The complaint data may also give consumers an insight into how well the firm performs in other areas of its business, such as customer service and policy adminsitration.  This news comes as the Financial Ombudsman Service, the independent organisation that deals with financial disputes between consumers and firms, recently published figures revealing that the number of complaints it upheld soared to 57%.  This is significantly higher than the long-term average of between 30% to 40% complaints it upholds.

The FSA plans to introduce the new regime during 2010 with financial firms publishing their first set of data in July 2010, and the FSA publishing the data on its own website in September 2010.