WIREDGOV

The Financial Services Authority (FSA) has offered firms a new waiver from its complaints handling rules regarding unauthorised overdraft charges for up to six months.

The new waiver has been granted to those firms who signed up to the January 2009 waiver. These firms represent approximately 98% of the market.

The new waiver has been offered to firms because, although considerable progress had been made in the test case, it is not yet clear how firms should be responding to complaints about unauthorised overdraft charges so that customers are treated consistently and fairly.

Whilst the waiver is in place, signatories will not be required to handle complaints relating to unauthorised overdraft charges within the time limits set out in the FSA's Dispute Resolution manual.

Dan Waters, director of retail policy and conduct risk at the FSA, said:"Although the test case is progressing well, we still do not have certainty on this complex issue. The FSA has reviewed the prevailing circumstances and decided to offer firms a new waiver for up to six months.  Our objective continues to be facilitating a fair and consistent resolution of consumer complaints about unauthorised overdraft charges."

The FSA will continue monitoring firms' compliance with the conditions of the waiver.  In particular, monitoring will seek to ensure that firms have appropriate systems and procedures in place to identify customers who are in financial difficulty, and that those customers are treated sympathetically and positively.

The waiver could be revoked at any time if the FSA considers it no longer appropriate, for example, if it does not provide adequate consumer protection, or material progress is not being made in the test case, or a firm fails to comply with the conditions set out in the waiver.

NOTES FOR EDITORS

1. The waivers are available on the FSA website.
   
2. The waivers contain some updates to previous versions including changes to acknowledge that the Banking Code is due to be replaced in November 2009, and a change to broaden the scope of the requirement that firms must apply to the FSA before making any changes to the level or structure of their unauthorised overdraft charges.
3. The FSA first granted a waiver for 12 months from its complaints handling rules regarding unauthorised overdraft charges in July 2007. This was followed by a new waiver with a duration of six months in July 2008 and a 6 month extension of this in January 2009.
   
4. The waiver means that while it is in operation, any bank or building society granted the waiver will not be required to handle this type of complaint within the time limits set out in the FSA rules. The county courts have 'stayed' cases referred to them and the Financial Ombudsman Service has adopted a similar approach.
   
5. The latest on the test case litigation can be found on Moneymadeclear.
   
6. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
   
7. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.