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Dealing with complaints
What is a complaint?
We define a complaint as any oral or written expression of dissatisfaction (whether justified or not) about the provision of, or failure to provide, a financial service (or a decision by a firm in relation to a consumer redress scheme). Generally the complaint must allege that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience. In some cases, the complaint must also relate to an activity that comes under the jurisdiction of the Financial Ombudsman Service (FOS).
How do I resolve a complaint?
The rules for how firms should deal with complaints are set out in the complaints handling rules (DISP). We expect regulated firms to resolve all complaints they receive properly and in line with these rules. In particular we expect firms to do the following:
- Investigate the complaint competently, diligently and impartially.
- Assess fairly, consistently and promptly:
- what the complaint is about;
- whether it should be upheld; and
- what action/redress should be taken.
- Provide fairly and promptly:
- a clear assessment of the complaint; and
- an offer of redress or remedial action, if appropriate
- Ensure any offer of redres or remedial action that is accepted is settled promptly.
Resolving complaints by close of next business day
If you have resolved a complaint, as set out above, by close of business on the business day following receipt of that complaint, then, providing the customer has accepted your response, you do not need to take further action.
A complaint can be regarded as having been resolved by close of next business day where the complainant has indicated that they accept your response, with neither the response nor the acceptance having to be in writing.
Keeping the complainant informed
When you receive a complaint you must send the complainant a prompt written acknowledgement that the complaint has been received and is being dealt with.
After this, you must ensure the complainant is kept up to date with progress in resolving their complaint.
Are there any time limits?
You must send a final response to a complainant within eight weeks of receiving the complaint. A final response is a written response that:
- states whether the complaint has been upheld;
- where appropriate offers redress or remedial action;
- encloses a copy of the FOS’s standard explanatory leaflet; and
- informs the complainant that if they remain dissatisfied they may now refer their complaint to the FOS and must do so within six months.
If you are not able to provide a final response at this stage, you must write to the complainant explaining why and indicate when you expect to be able to provide a response. You must also inform the complainant of their right to refer the complaint to the FOS and enclose a copy of the standard explanatory leaflet
Abolishing the two-stage complaints handling process
From 1 July 2012, firms will no longer be able to operate a ‘two-stage’ complaints-handling process.
(In a two-stage complaints process a firm provides the customer with an ‘initial response’ which asks the customer to come back if they are still not satisfied. Only if the customer comes back will the firm then send a ‘final response’.)
This change means that firms must issue a final response to all complaints within eight weeks.
Complaints handling procedures
You need to have effective and transparent procedures in place for dealing with complaints reasonably and promptly. These procedures must be documented.
You must appoint an individual at your firm, to be responsible for overseeing your firm’s compliance with DISP. (This individual must be carrying out a ‘governing function’ as set out in the table in SUP 10.4.5 R.)
Learning from complaints
For complaints that do not relate to MiFID business, you must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints you identify and remedy any recurring or systemic problems.
To do this you may wish to adopt the following processes (depending on the nature, scale and complexity of your business and the number of complaints you receive):
- collect management information on the causes of complaints and the products and services that complaints relate to;
- identify the root causes of complaints, prioritise dealing with any root causes identified, consider whether such root causes may affect other processes or products, whether root causes should be corrected and how this should be done;
- regularly report information to senior personnel about recurring or systemic problems where the information may be needed to take steps to identify, measure and control risks; and
- keep records of analysis and decisions taken by senior personnel in response to information on the root causes of complaints.
When you identify recurring or systemic problems you should consider whether to act for customers who may have suffered detriment from or been disadvantaged by such problems and who have not complained. If so, take appropriate and proportionate action to ensure these customers are given appropriate redress or a proper opportunity to obtain it.
Learning from ombudsman decisions
Your complaints handling procedures should, taking into account the nature, scale and complexity of your business, ensure that lessons learned as a result of decisions by the ombudsman are effectively applied in future complaint handling, for example by:
- relaying an ombudsman decision to the individual in the firm who handled the complaint;
- analysing any patterns in ombudsman decisions; and
- analysing guidance produced by the FSA, other regulators and the FOS and communicating it to individuals dealing with complaints.