New FCA Rules Will Force Firms to Flag Complaints From Vulnerable Customers

What Is Changing in the UK’s Complaints Framework?

The UK’s Financial Conduct Authority is restructuring how financial firms report consumer complaints, replacing five separate returns with one consolidated structure. The new approach, due to take effect in 2027, gives firms a single set of rules and a standard six-month cycle. For the first time, firms must also identify complaints involving vulnerable customers, a group the FCA has struggled to track with precision under its older returns.

The regulator says the updated system will deliver consistent datasets and cut the inconsistencies that have limited its view of emerging issues. “By streamlining returns and introducing clearer guidance, we’re making it easier for firms to provide high-quality complaints data while strengthening our ability to protect consumers, particularly those who are most vulnerable,” said Sarah Pritchard, the .

Investor Takeaway

Why Was Reform Needed?

The update follows more than a decade of difficultys tied to fragmented reporting inherited from the era. Supervisors have long worked with sector-specific datasets that made it hard to compare firms or identify difficultys ahead. The fragilenesses became obvious during mis-tradeing scandals such as payment protection insurance, where redress eventually climbed above £38 billion. Complaints in that case surged years later than the misconduct had taken hold, partly because the FCA lacked consistent formats, timelines and taxonomies.

The pattern repeated in disputes, consumer-credit complaints and issues linked to digital banking outages. Thresholds for reporting varied widely, some firms closed cases at diverse speeds, and categories were not aligned across the industry. The FCA ended up maintaining five diverse returns covering mortgages, e-money, consumer credit, payment services and other areas — each built independently over time.

The consolidated return replaces that patchwork with a single structure designed to allow clearer comparisons and remove the mismatches that have hindered supervision since the ahead 2010s.

Why Are Vulnerable Customers Central to the Reform?

The renewed focus on vulnerable customers reflects broader pressure on firms since the Consumer Duty took effect in 2023. The Duty requires firms to deliver “excellent outcomes” for all customers and pay particular attention to those facing health issues, financial strain or reduced digital capability.

Data on these groups has been inconsistent. Many firms have not tagged vulnerability in internal systems, leaving the FCA without a reliable view of how cases are resolved. The pandemic, the cost-of-living crisis and a rise in scam losses pushed the issue further up the political agenda, with MPs on the Treasury Committee repeatedly criticising firms for fragile treatment of at-risk customers.

The new reporting rule forces firms to identify these complaints explicitly, giving supervisors a clearer sense of where risks are building and whether firms are living up to their .

Investor Takeaway

What Does This Mean for Firms Ahead of the 2027 Deadline?

The new regime applies to the six-month period from 1 January to 30 June 2027. Until then, firms will receive updated guidance and a long transition window to upgrade systems. The FCA extended the timeline later than industry criticism during previous implementations, including the Consumer Duty rollout, where many firms struggled to adapt internal processes at speed.

Operationally, firms will need to rework their complaint-management systems, calibrate tagging for vulnerable customers and map legacy categories to the new unified framework. The shift is expected to simplify ongoing reporting but may require heavy investment in the short term.

Benchmarking will become easier once the regulator begins publishing standardised data, increasing reputational pressure on firms with high or rising complaint rates. The FCA views the consolidated return as the groundwork for a more coherent picture of the financial-services landscape, particularly at a time when arrears, and customer stress indicators are rising.

As firms prepare for the 2027 transition, the FCA’s stance is direct: better data, clearer reporting and stronger oversight of customers most at risk.