UK's FSA to expose banks' complaint handling flaws

LONDON (Reuters) - The financial regulator plans to expose any failings in the way banks and insurers handle complaints by forcing them to reveal how many gripes they receive and how quickly they are dealt with.

Under draft regulations unveiled by the Financial Services Authority on Thursday, financial firms would have to publish their complaints data every six months, while the FSA would publish figures for the sector as a whole twice a year.

Dan Waters, the FSA's director of retail policy, said the move would give companies an incentive to improve their complaints handling procedures.

"Transparency is an important regulatory tool. We consider that publishing this information will incentivise firms to deal more effectively with complaints and help to raise standards in this important area," Waters said in a statement.

The companies that attract the biggest number of complaints would have to reveal how many they have received, as well has the proportion that have been upheld and the percentage that have been closed within eight weeks.

The proposed new disclosure rules are open for consultation until October 30.

(Reporting by Myles Neligan; Editing by David Holmes)