1. The Council welcomes the initiatives taken by the HKMA to revise the guidelines for AIs in dealing with customer complaints. There are a number of suggestions the Council would like to put forward for consideration of the HKMA in regard to the guidelines.
General Guidance
2. The Council notes that the HKMA issues this guidance note to AIs, but there is not similar guidance for consumers on the complaints handling procedures. For example, the UK Financial Services Authority issues a guide for consumers on how to lodge financial services complaints. To facilitate consumers in making a complaint, we suggest the HKMA could publish a guidance note for consumers setting out the existence of AI obligations in this regard, and set out procedures on how to make a complaint to an AI. While this could be made available by the HKMA and displayed on its website, the Council would be happy to distribute any guidance notes on behalf of the HKMA, through its network of branch offices. This would supplement any similar notices that AIs might make available to their customers.
Accessibility
3. The issue of 'accessibility' in para 2.3 of the consultation paper. While there is a requirement that AIs make copies available of its complaint handling procedures, the Council queries how this would work in practice unless there is a public notice drawing consumers' attention to the fact that there are complaints handling procedures. Merely producing a brochure, for example, would not be entirely satisfactory, as:
(a) consumers would not be expected to have prior knowledge of the existence of the brochure at the time of contemplating whether to make a complaint;
(b) consumers would have to rely on staff to provide copies, if stocks are kept with staff for distribution; or
(c) consumers would have to search for it amongst other brochures produced and displayed on the premises, if the policy of the AI is to store it with that other information.
4. The Council suggests that an additional point be added to para 2.3.2 along the lines of "Prominently display a notice in the public area of each branch of the AI, giving details of the AI's internal complaint handling procedures and a contact telephone number within the AI for customers to use in following a complaint that may have been made in the branch." This is to ensure that in cases where leaflets are not available, or are not directly visible to customers that they are made aware of the complaints handling procedures. It would also provide a contact number if they are dissatisfied with the manner in which the branch is handling a matter.
Complaints Handling
5. Para 3.1 refers to acknowledgement of complaints - The Council suggests that it should be stipulated that contact details of the person handling the complaint within the AI should be provided in the acknowledgement letter, so that the complainant can contact the person if necessary.
6. Para 3.2 refers to the final response to the complainant - The Council suggests that AI's response letter should also state which body regulates it in case that the complainant is still not satisfied with the way the AI has handled the complaint.
7. At present, if a complainant is not satisfied with an AI's final response, there is little elsewhere that the complainant can go, apart from the Small Claims Tribunal or the court; if the complaint is an actionable matter. In its previous submission to the HKMA, the Council suggested that there is a need for an easily accessible means of resolving disputes and achieving redress, which is readily available to customers of banking services. The HKMA should explore with the industry, an appropriate mechanism for introducing dispute resolution procedures, for example, whether an independent and centralized dispute handling mechanism such as Banking Ombudsman should be established.
Record Keeping
8. Para. 4.3 refers to inspection of records -Collection of such information is useful for profiling problematic banks and for improvement of the banking industry as a whole.
9. In order to assist in this process, the Council suggests that complaint information should be maintained under specified categories. This would allow the HKMA to aggregate complaint information under those categories in order to profile individual banks against those categories and identify trends in market behavior that may need corrective action by the relevant associations or the HKMA. For example, the categories could be complaints made against:
- Misleading & deceptive conduct re: fees & charges;
- Improper collection, use & holding of customer information;
- Unfair marketing practices;
- Non-use of APR;
- Failure to draw adequate attention on salient terms & conditions;
- Inadequate security of cards/pins;
- Errors in transaction records;
- Unauthorised transactions;
- Claiming an amount in excess of liability of loss;
- Unfair debt collection practices; etc.
