APCC Regional Forum

1. September 2014 APCC Regional Forum

2. Agenda

3. Effective Communications with Small Firms APCC Presentation Matthew Thompson

4. The importance of effective communications Compliance Regulation

5. Effective Communications Should… Reach the right audience Explain how the information affects that audience Encourage the right action to be taken

6. How are we communicating? Email – Direct sector specific information Website – Discussion Papers, Guidance Video – RDR, Risk Outlook Face to Face – Workshops, Speeches Trade Press – Consumer credit Social Media - Twitter

7. The role of compliance consultants Compliance Regulation

8. Your views… matthew.thompson@fca.org.uk

9. Consumer Credit FCA authorisation

10. Today… Overview of application process Experience to date Questions No detail on technical matters or specific applications/business models

11. Our approach

12. The firm journey Full authorisation Interim Permission New entrant Full application VoP

13. If firms want to start offering consumer credit When to apply? Now Firms can still prepare now, so they are ready to apply • If firms have interim permission • If firms miss this date, they will need to stop regulated credit activities Your application period

14. How much it costs to apply • Note – income figures must be right • Brokers - amount paid for credit services • Amount from consumer credit activities – not turnover • Firms will need to pay an application fee when they apply • The fee will be a calculation based on how complex we think the application is and the consumer credit income • We have put all firms into different complexity categories based on what they do: • Limited permission • Straightforward: eg credit broker • Moderately complex: eg, lender • Complex: eg debt management company

15. Application fee breakdown

16. The application journey Application received Hybrid cases Initial vetting Case officer assessment • Systems • Databases • Convictions • Further information requests Decision • Firm meetings • Firm visits • Risk scoring • Team allocation

17. Help for firms Webinars ‘Credit Ready’ Packs Website – FAQs & guidance Checklists Speaking events Help text in Connect Case officer support Contact Centre Keep the FCA updated on any firm changes – check and update CCI.

18. Timescales and progress • How long – depends on complexity and quality. • Statutory Deadline – 6/12 months • Have completed a number of more detailed assessments • Visits, firm meetings and conference calls • AR progress & volumes • Too soon to say – Principal Application Period has only just closed and these are being assessed • 1st application period soon and this will dramatically change our current portfolio

19. Experience so far • Permissions • Wrong ones • Limited permission • ‘Just in case’ • Criminal convictions – significant events • Failing to disclose all controllers • Lack of documents – secci, adverts, credit agreements etc • Unclear business models • Lack of competence • Over reliance on 3rd parties • Brokers • Advisors

20. Your role? What can you do to ensure rapid progression? • Complete business models • Why permissions are required • How the business will work, what will the business do and why, and how it will make its money • Examples of key docs and advertising • How the firm is set up, who works there and their role, skills and experience • Who owns or influences the business (controllers) • Compliance strategy • Financial information • The firm’s history and full disclosure of any ‘significant events’

21. Your role? • Bespoke applications • Remember we need to hear from the firm – especially during visits • Honest and transparent with firms • Cold calling • Need for a consultant • Authorised/approved by FCA

22. Questions?

23. workingtogether Association of Professional Compliance Consultants September 2014

24. what does the ombudsman do? set up by law … … as an alternative to the courts to resolve disputes … … and help both parties move on share our experience and insight not a regulator!

25. free independent impartial informal and how do we do it?

26. the tools we use ‘fair and reasonable’ outcomes inquisitorial powers inquisitorial powers

27. complaint ‘in time’? business covered? activitycovered? eligible complain-ant? within UK? jurisdiction – which complaints do we cover?

28. when is a business covered? • a business is subject to our jurisdiction where: • it is FCA-authorised to carry on any FCA-regulated activity (= Compulsory Jurisdiction) • this can also include ‘inherited’ jurisdiction • it subscribes to our Voluntary Jurisdiction • Consumer Credit Jurisdiction now fallen away • post April 2014, former OFT licensees should be FCA (interim) authorised firms

29. investigation resolution by consent review final decision enquiries and referrals process - how we deal with complaints

30. financial losses directions interest ‘trouble and upset’ costs (rarely) redress - putting things right

31. our workload

32. consumer credit complaints over time

33. consumer credit numbers

34. help from us • online at: www.financial-ombudsman.org.uk • technical advice desk helpline: 020 7964 1400 technical.advice@financial-ombudsman.org.uk

35. any questions?

36. ANDREW GIBBONS ACII MIoD Managing Director Mason Owen Financial Services Ltd Chair – Industry Claims Initiative

37. AGENDA • Background • Formation of the Group • Objectives of the Group & Progress • FCA Thematic Review of Personal Lines Claims • Future Developments in Claims • Q&A

38. BIBA RESEARCH • Carried out January 2013 • 90% of brokers believe that insurers are stricter on paying claims • More strict due to the economic climate and fraud • 66% of brokers were finding it harder to conclude claims

39. BIBA RESEARCH • 75% of brokers have overturned a claim rejection by an insurer in the last year • 70% of brokers had secured an increase in claims payment for a client • 43% of brokers achieved an average percentage uplift on claims of between 11% and 20%

40. THE RESULT • Public spat • Missed opportunity for reasoned debate • Confirmation of the Regulator’s interest in this area

41. MACTAVISH REPORT • Insurers dispute half of “significant” business claims since 2008 • Insurers take an average of 35 months to settle disputed claims • Reasons include breaches of conditions or inadequate information disclosure

42. INSURANCE TIMES - 3RD SEPT 14

43. INSURANCE TIMES - 3RD SEPT 14

44. INDUSTRY CLAIMS INITIATIVE • Formed / Launched April 2013 • Made up of industry stakeholders • Opportunity to explore the issue of claims more thoroughly

45. MEMBERS

46. MEMBERS

47. MEMBERS

48. TERMS OF REFERENCE • To support the FCA thematic reviews on claims • To improve the customer experience of claims • To promote positive stories surrounding the industry with particular reference to claims

49. PROGRESS • Claims is Point 6 of the BIBA Manifesto • The group is recognised by government • The group is recognised by the FCA

50. POSITIVE STORIES • Industry Pays £40m in claims every day • Insurance Times – The Knowledge • Covered extensively in the Broker Magazine • Further work being undertaken by Insurance Times in relation to claims and transparency following FCA Conference