FCA Changing Regulations Concerning Customer Call Recording

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Recording telephone conversations with the customer is an important function for many companies in the U.K. Especially in the financial industry, recording customer calls is crucial for monitoring and managing service levels, assisting professional development and protecting against disputes.

However, any financial firm that uses telephone recording software – or lack thereof – needs to be extra wary when using such a system, as call recording is heavily regulated by the Financial Conduct Authority (FCA). Recently, the FCA has passed more stringent recordkeeping regulations concerning call recording.

FCA Rules Regarding Call Recording

The FCA Rules on call recording are stated in COBS 11.8. The FCA summarized the regulations as follows:

“The rules in COBS 11.8 oblige firms to retain records of specific telephone conversations and electronic communications of client order services that relate to the reception, transmission, and execution of client orders and proprietary trading. It includes communications that are intended to result in a transaction, even if ultimately they do not.”

In 2017, FCA signed a final ruling regarding call recording under the newly-implemented Markets in Financial Instruments Directive II (MiFID II). The regulator’s final rules, published in Policy Statement 17/14, provide financial firms under Article 3 of MiFID II with the option to either record conversations relating to transactions or take written notes.

This means that firms need to decide which method – manual note taking or conversation recording – is more appropriate for them and apply it consistently across their operations. However, since MiFID II also requires all records to be securely stored in a format that cannot be easily manipulated or altered, many financial firms have opted to use enterprise archiving systems to capture and ensure the integrity of their customer call recordings.

In June 2018, FCA also announced their proposals for the Claims Management Companies (CMCs), which will need to be followed once the FCA has taken over as the CMC regulator on April 1, 2019.

Under the proposed rules, CMCs will be required to record and keep all customer calls for at least 12 months. They must also maintain records of the text message and email communications to ensure that they can be monitored and investigated for what FCA calls ‘aggressive’ sales methods.

According to Andrew Bailey, Chief Executive of the FCA, “We want CMCs to be trusted providers of high quality, good value services that can truly help consumers. A key element of our approach to regulation will be ensuring that consumers are both protected and treated fairly.”

GDPR and Call Recording in the UK

The recently enacted the General Data Protection Regulation (GDPR) has superseded the U.K.’s Data Protection Act and goes further in protecting individual’s privacy ahead of companies. The good news for companies is that the goals of the GDPR aren’t radically different from the DPA, as it is primarily concerned with data security, the protection of privacy, and the way companies process data, in this context – call recordings.

The GDPR suggest that companies must justify their recording of phone calls as per the following guidelines:

  • All parties involved need to give consent to the call being recorded.
  • The recording is a requirement for the fulfillment of a contract.
  • The recording is a legal requirement.
  • The recording is necessary to protect the interests of one or more participants.
  • The recording is in the public interest.
  • The recording is in the interests of the recorder unless those interests are less important than those of the participant.

To avoid non-compliance, potential legal issues, and loss of your reputation with customers and stakeholders, follow call recording laws issued by the government and various agencies. In the U.S., you must comply with both federal and state laws to record calls, for any reason.

Equally important is that you have a reliable archiving system in place that will enable your business to capture and retain all business-related telephone calls, as well as SMS messages, social media content, chats, email, IMs, and other types of electronic communications taking place in your employees’ personal or corporate-owned devices.

TeleMessage’s Mobile Archiver solution helps companies efficiently manage data and content including enterprise telephone calls, SMS, emails, and web and social media content concerning FCA compliance. Our archiving solution is equipped with versioning and robust governance capabilities that ensure content across all digital channels is compliant and meets global regulatory requirements.

Contact us today to learn more about mobile archiving solutions.

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