1. Business. Empowered. CONFIDENTIAL COMPLAINTS HANDLING ROUND TABLE 12 th February 2013

2. CONFIDENTIAL Welcome Topics for Discussion □ Claims Management Companies (CMCs) □ FOS Escalations, Overturns and Fees □ Time Barring □ Proactive Mailing □ Embracing Complaints □ Insourcing v Outsourcing

3. CONFIDENTIAL Claims Management Companies (CMCs) ■ Impact of CMCs on workload. ■ Proportion of complaints submitted via CMCs. ■ Engaging with CMCs and managing the relationship with them. ■ New trends in CMC behaviour – are they starting to look beyond PPI? ■ FOS Annual Report 2012 – cases referred by CMCs: □ PPI 83% □ Credit Card 10% □ Current Accounts 4% □ Mortgage Endowments 3% 3

4. CONFIDENTIAL FOS Escalations, Overturns and Fees ■ What is the industry experience of FOS escalations? □ FOS data from the top PPI providers indicate that approximately 7% of complaints are being referred. ■ Strategies to minimise FOS referrals and overturns. ■ In April 2013 the FOS standard case fee increases from £500 to £550. Supplementary fee for PPI cases: £350. ■ Experience of the FOS charging per policy rather than per case. ■ Consistency and fairness of FOS decisions. 4

5. CONFIDENTIAL Time Barring “Normally, customers have six years from a sale to complain or, if later, three years from when they became aware (or ought to have become aware) that they had cause for complaint. When a complaint is made outside this limit, the firm is no longer obliged to consider it and can reject it; the Financial Ombudsman Service may also dismiss a complaint made outside these time limits.” – FSA Guidance Consultation on PPI Customer Contact Letters ■ Consumer groups are lobbying against time-barring. ■ The BBA is pushing the FSA to allow time-barring on PPI complaints ■ What are your views? 5

6. CONFIDENTIAL AOB? Any other business? 6

7. CONFIDENTIAL 7 Thank you for attending

8. CONFIDENTIAL Additional Information ■ CMCs: □ 40% to 70% of inbound complaints originating from CMCs. □ 30% of CMC cases referred to the FOS. □ CMCs undertaking aggressive Subject Access Requests (SARs). ■ Proactive Mailing: □ 2 or 3 mailings required to provide fair opportunity to engage. □ Little interest in Big Bang – unless population is very small. ■ FOS Escalations and Overturns: □ No data. ■ Insourcing v outsourcing: □ Mixed model provides both flexibility and control. ■ Embracing Complaints: □ Feedback welcomed as part of wider customer strategy. □ RCA exists but capability is limited due to system constraints and difficulties integrating different business areas. 8

9. CONFIDENTIAL Which? CMC Research ■ Which? conducted two relevant studies in 2012. ■ Survey of 2,000 consumers indicated: □ 25% unaware that CMCs take a fee. □ 51% believed using a CMC would make their complaint more successful ■ Mystery shopping of 45 CMCs indicated 33% had serious shortcomings in their processes, including: □ Success rates being exaggerated. □ Discouraging consumers from pursuing individual complaints. □ Failing to disclose charges upfront. 9