Businessman misunderstands and looks confused





How to tell if you’ve received a complaint or a gripe, and why the difference could be crucial

No matter how many years of experience or professional qualifications you have, it’s ever more likely that you’ll receive complaints from clients. You may also receive suggestions of a problem that may be about to arise – for want of a better description, let’s call these “gripes”.

But how do you decipher whether you’re dealing with a complaint or a gripe?

Making the correct distinction can help ensure that you take the correct course of action – and could influence whether the matter is resolved swiftly. Handle things wrong and the matter could escalate into dealing with a very difficult client relationship and a lengthy and potentially costly dispute or claim.

Failing to recognise the difference between a complaint and a gripe could have wider implications, too.

In particular, it could result in problems with your professional indemnity (PI) insurance. If you fail to inform your insurance provider with the appropriate disclosures or notifications, you could find that your PI is invalidated, leaving your firm exposed with no PI protection.

With this in mind, read on to find how to spot the difference and how you can effectively handle them and avoid jeopardising your PI cover.

How to recognise a complaint

While the dictionary definition of a complaint is: “An utterance or statement of grievance or injustice suffered”, the FCA defines a complaint as: “any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, any person about the provision of, or failure to provide, a financial service”.

If you receive a complaint, it needs to be dealt with in accordance with your firm’s complaint procedure.

This should correlate closely with the FCA rules, which define that the financial institution is required to investigate the complaint. As such, the firm must assess fairly, consistently, and promptly whether the complaint should be upheld and what remedial action or redress may be appropriate.

Having done the above, the firm must then explain its decision to the customer and undertake the proposed remedial action or pay the redress.

As well as following your company’s complaints procedure, your firm’s PI policy may mandate that you also notify your insurers and should specify whether it’s a “complaint” or “circumstance”.

If you don’t do this, your insurance may not protect you. So, it’s essential that all staff are fully aware of the company’s complaint procedure as well as its PI requirements.

Cognisant of all the facts, upon receipt of a complaint the information should be brought to the attention of a senior manager or compliance manager as soon as possible – so they can decide next steps and understand whether your PI insurer should be notified.

How to identify a claim

PI policies are written on a “claims made” basis, requiring a policyholder to give notification of any claim made against them during the term of the policy.

So, when is a “claim made”?

The good news is that some policies define what a “claim” is – if this is the case with your PI cover, familiarise yourself with that definition and consider it carefully when you’re faced with any complaint.

Unfortunately, other policies aren’t so cut and dried and may not include a definition you can refer to.

Why and how circumstances play in

Generally, a PI policy will specify that the policyholder is obliged to notify “circumstances” that arise during the policy term. All and any circumstances that are likely to give rise to a claim or may to give rise to a claim need to be brought to the attention of your insurance provider.

This is crucial, as failure to notify or disclose a circumstance to insurers, could mean that any claim that later arises from the undisclosed circumstance could be excluded from cover.

Knowing how to recognise circumstances and assess whether they may or are likely to lead to a claim isn’t always straightforward.

Fortunately, we can help. Have a conversation with us and we’ll help put your mind at ease and give you the information you need to understand the best course of action.

Get in touch

If you’d like to know more about how we can help with compliance, claims, and deciphering the difference between a complaint and a gripe, we’d be delighted to answer your questions.

Please email, book a short call by completing our online form, or call 029 2000 2325.