Complaints Handling – Are your procedures up to scratch?

No one likes receiving a complaint. However, complaints handling is an area of interest for the FCA, so it is important to ensure that you have the correct procedures in place, should you receive a complaint.

Complaints are covered in the FCA Handbook under The Disputes Resolution Procedure (DISP). According to the FCA, the definition of a complaint is:

“Any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service or a redress determination, which:

  • alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience;
  • relates to an activity of that respondent, or of any other respondent with whom that respondent has some connection in marketing or providing financial services or products, which comes under the jurisdiction of the Financial Ombudsman Service.”

What do firms need to consider?

Firms should have in place a written complaints procedure, which includes:

  • The definition of a complaint and how to recognise complaints
  • How to report a complaint to a senior person at the firm
  • Identifying who is responsible at the firm for dealing with complaints (and their deputy)
  • What the timescales for dealing with complaints are
  • How a complaint will be categorised
  • How complaints are recorded
  • How complaints will be monitored and analysed by the firm

What firms must do to improve complaints handling

The first practical step is to review your current complaints procedure to check if it is up to date. Remember that this can provide valuable management information when looking at whether customers have been treated fairly. Use this data to spot trends and “nip issues in the bud” where you can.

Training and Competence

A sound understanding of complaints handling falls under the eight core knowledge requirements of the Insurance Distribution Directive (IDD). Those involved in the insurance distribution chain must demonstrate the minimum necessary knowledge in complaints, proportionate to their individual role in the industry.

All staff should receive adequate training on complaints handling, and must be kept informed on current procedures and made aware of who they should speak to when they need to pass on a complaint.

For users of the Aviva Development Zone, take a look at our mini-pathway on complaints handling. The pathway looks at the principles of customer service, explains how to handle complaints according to FCA rules and looks at the role of the Financial Ombudsman Service (FOS).

Treating Customers Fairly

Complaints handling is linked to the responsibility to Treat Customers Fairly (TCF). Outcome Six covers the issue of complaints, and states:

‘Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.’

Therefore, one of the most important considerations when handling complaints is ensuring you are acting in the best interest of your customers. This includes those who are susceptible to harm - i.e. vulnerable customers.

The coronavirus pandemic has exacerbated the circumstances in which a person can become vulnerable, including, for example:

  • loss of income
  • poor health
  • the physical and mental impacts of isolation
  • the need to care for others
  • unexpected life events such as bereavement

Firms should ensure that they can communicate their services effectively and can adapt their procedures, if needed, to accommodate these issues. 

Complaints handling can often be a challenging experience, especially when emotions are added into the mix. However, complaints can be an invaluable tool in improving your customer service – learn from any complaints you receive and strive to do better in future. By dealing with a complaint professionally, efficiently and graciously, you can turn a potentially negative situation into a positive one by showing the customer that you care.

If you need advice on complaints handling or other compliance issues, please contact your RWA Business Manager or email

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