Changes are being made to the Handbook which will mean that certain professional clients will be able to have their complaints dealt with under the Financial Ombudsman Service regime and as such firms will have to apply the ‘complaints rules’ in DISP to these professional clients.
One of the requirements in DISP 2 (which sets out the scope of the FOS jurisdiction) is that the complainant must be an ‘eligible complainant’. By way of a reminder, the term ‘eligible complainant’ also applies to an investor in an unauthorised AIF when the respondent is the AIFM. Aside from entities such as micro-enterprises, small charities and small trusts, a ‘consumer’ is an eligible complainant (DISP 2.7.3). For this purpose a ‘consumer’ is a “natural person acting for purposes outside his normal trade, business or profession”.
As such an individual classified as an elective professional could be ‘a consumer’ and, on the face of it, be covered by FOS. However among the exemptions (as in who is not an eligible complainant) in DISP we find DISP 2.7.9(2) which advises that professional clients and ECPs fall outside the definition of eligible complainant.
The rule will remain but a new rule (DISP 2.7.9A) will be introduced to explain that DISP 2.7.9(2) does not apply to “a complainant who is a consumer in relation to the activity to which the complaint relates”.
The effect will be that e.g. a firm that is classified as ‘professional’ will not be an eligible complainant but an individual (assuming that they meet the definition of ‘consumer’) classified as ‘professional’ will be an eligible complainant and so firms will have to ensure that complaints are dealt with in accordance with DISP 1.
The changes are brought about as a result of the Alternative Dispute Resolution Directive (ARD).
The changes to the Handbook, including ‘appropriate wording’ for final responses, can be found in Instrument FCA 2015/25.
The new regime applies from 9 July 2015 (and only in respect of complaints received from that date).