DISP App 3.4 Root cause analysis

This section applies to both step 1 and step 2, as appropriate.

DISP 1.3.3 R requires the firm to put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems. If a firm receives complaints about its sales of payment protection contracts it should analyse the root causes of those complaints including, but not limited to, the consideration of:

1. (1)

   the concerns raised by complainants (both at the time of the sale and subsequently);

2. (2)

   the reasons for both rejected claims and complaints;

3. (3)

   the firm's stated sales practice(s) at the relevant time(s);

4. (4)

   evidence available to the firm about the actual sales practice(s) at the relevant time(s) (this might include recollections of staff and complainants, compliance records, and other material produced at the time about specific transactions, for example call recordings and incentives given to advisers);

5. (5)

   relevant regulatory findings; and

6. (6)

   relevant decisions by the Financial Ombudsman Service.

Where consideration of the root causes of complaints suggests recurring or systemic problems in the firm's sales practices for payment protection contracts, the firm should, in assessing an individual complaint, consider whether the problems were likely to have contributed (at step 1) to a breach or failing or (at step 2) to a failure to disclose commission in the individual case, even if those problems were not referred to specifically by the complainant.