Regulator says firms must step up efforts as 13% miss first deadline.
One in five brokers could fail to meet the December deadline for treating customers fairly (TCF), according to the FSA.
The regulator’s warning followed the passing of its March deadline for having management information systems in place – the first step in the process.
It said this week that just 13% of the firms it had assessed had the adequate systems in place and predicted that 20% would fail to hit the final deadline.
Sarah Wilson, FSA director, Treating Customers Fairly, warned that firms must step up their efforts to meet all the regulatory requirements by the end of the year.
She said: “Having appropriate management information or other measures in place puts firms in a position where they can measure the quality of the outcomes they are delivering for consumers,” she said.
“These results show that adequate [management information] is not yet fully in place in the firms assessed. It does not mean that they are treating their customers unfairly.
“However, we now expect all firms to maintain their momentum and to undertake a significant amount of further work to meet the December deadline of demonstrating that they are consistently treating their customers fairly.”
Brokers that fail to meet the March deadline and those that are also likely to miss the December deadline could now face intervention from the regulator.
Which? personal finance campaigner Dominic Lindley said that failing firms should be named and shamed. “We have long said that the FSA needs to stand strong to ensure that firms which fail to treat their customers fairly suffer damage to their reputation and bottom line.
“It is disappointing that only 13% of larger companies have met the
March deadline. We still believe that naming and shaming is a powerful way to improve the industry,” he said.
In January, the FSA launched an enhanced programme for small firms and a nationwide programme of assessments after pledging to get tough on businesess that were failing TCF requirements.