5 Golden Rules for Complaints
What is a complaint?
The FCA defines a complaint as an expression of dissatisfaction (oral or written) about the provision of, or failure to provide, a financial service. It alleges how a customer may have suffered (or may suffer):
- financial loss;
- material distress; or
- material inconvenience
Every complaint will be different but the processes and methodology in dealing with them, are universal. The procedures are laid down by the FCA and underpin what a firm should and shouldn’t do but essentially there are five golden rules.
5 Golden Rules
1 – Record, Acknowledge, Notify and Report
These may seem obvious but often firms become so caught up on the complaint itself that it forgets the fundamental steps that should be followed.
It is essential to maintain a complaint register and as soon as the complaint is received, whether verbally or in writing the register should be updated and the clock starts ticking. Generally a firm has 8 weeks to resolve a complaint and issue its Final Response (FR).
It’s important to Acknowledge the complaint in writing and provide the complainant with a written copy of the firm’s complaint policy.
Regardless of whether you consider the complaint frivolous or of low value / below your PI insurance excess/retention, you should notify your insurers.
You will also need to report complaints data to the FCA in your returns.
2 – Be Objective
Take time to fully understand the complaint and where the customer is “coming from”. If you need more information from them, ask. Only once you have the complete picture, make an objective assessment of the issues raised.
3 – Identify Any Root Causes
It is essential to analyse the cause of the complaint and investigate if there is a systemic problem. Issues for example could be around lack of training or poor product design and the FCA would expect a firm to address such short comings to ensure further similar complaints do not occur.
4 – Be Fair
Rejecting a complaint without fully considering all the circumstances is not only non-compliant but will only frustrate the complainant and make an agreed resolution harder to achieve.
5 – Right To Escalate
Regardless of your conclusion in the FR you must advise the complainant of their right to escalate the complaint to the Financial Ombudsman Service. This is a simple requirement but is often over looked by firms when issuing what they believe to be a compliant FR.
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