The voice of consumer rights groups, internet forums and traditional media on perceived unfair treatment of customers by lenders, grows ever louder.
FSA regulated businesses are dedicating huge amounts of time and money embedding Treating Customers Fairly (TCF) principles across their business to safeguard against claims of unfair pressure from their customers.

As a legal service provider on lenders’ panels for remortgage, conveyancing and litigation services, we have a duty to embed the FSA principle of TCF into our own business.

As the industry faces possibly its fiercest ever glare from the media and public interest spotlight, how do we ensure that TCF becomes a company-wide policy and not simply an empty gesture of box ticking? How should we as legal advisers to the industry ensure we fulfil our TCF responsibilities and help our clients to meet theirs? How do we make TCF stick?

The principles behind TCF are not foreign concepts to lawyers. As service providers, we too are required under our own Code of Conduct to act with integrity, to a good standard of service and with the best interests of our clients at heart. We must give our clients clear information about our service and the cost, keep them updated and operate an effective complaints handling procedure.

The FSA’s vision of TCF is that firms must be able to demonstrate consistently fair outcomes for consumers and that its senior managers take responsibility for ensuring the company and all its staff deliver those outcomes through establishing an appropriate company-wide culture. That means that the whole team understands what TCF means, where staff are expected to achieve it and how they put things right when there are mistakes.
Performance measurement is critical against all customer fairness issues in the business and there must be clear evidence of acting on the results and demonstrating through those measures that they are delivering fair outcomes.

Customers need to be confident that they are dealing with firms where TCF is central to the corporate culture.  They must be given clear information and any advice must be suitable and take account of their circumstances.

So what does this mean for us? To properly embed TCF in our company-wide culture we are currently working to ensure that:

• TCF principles are written into firm-wide objectives and then translated into team and individual objectives and targets.
• TCF is communicated to staff and staff are trained in the principles of TCF and what that means to them on a daily basis.
• The customer understands the documents provided and that all correspondence with the customer is retained.
• Complaints are dealt with in line with regulatory requirements and staff are trained in effective complaint handling.
• Complaints are logged and reviewed, errors investigated and corrective action put in place.
• Staff are encouraged to suggest changes that will reduce complaints.
• TCF principles are built into customer feedback questionnaires and staff surveys, file and telephone audits and performance reviews.
• Staff are appropriately trained to perform their jobs and reward and remuneration is based on an assessment of the employee’s competence in relation to policies such as TCF, as well as their financial performance.
• MI including complaint logs, customer questionnaires and audits are fed into senior management for review and an internal audit function sense checks the MI.
• All areas of weakness are identified and fed into risk management processes and continuous improvement processes.

From the top down TCF needs to form part of the business. It is certainly not just about producing a glossy policy. It is about establishing the right culture and framework throughout the firm so that senior management can convert the good intentions set out in the TCF policy into actual fair outcomes for customers.

More than anything TCF is about establishing the right behaviours in staff, taking time to understand customers’ needs, communicating clearly, setting appropriate expectations, providing a service in line with expectations and responding to complaints fairly and promptly.

The bottom line is that TCF, whether it is known in this form in the future or as “conduct risk” or “fair treatment of customers” or some other euphemism, is simply about providing a fair service. That is why there is a need to embed TCF as “business as usual” into daily activities and not as a stand alone initiative. A thorough and robust business culture which embraces TCF could be just the tonic when it comes to facing claims of unfair treatment.

For more details on how we’re embedding TCF into the firm, please contact me directly on 0844 571 5914.