How your firm should deal with complaints from customers.
Handling complaints well is an important aspect of treating customers fairly, putting things right where mistakes are made, and ensuring customers can access redress where they have experienced harm.
Your firm must have an effective and transparent approach for handling complaints fairly and quickly.
You must:
- Make sure someone in your firm is responsible for compliance with these rules.
- Publish details about how customers can complain about your firm’s conduct, or the conduct of your firm’s AR, and how your firm handles and seeks to resolve complaints (for example on your website).
- Explain the role of the Financial Ombudsman Service in a clear and accessible way, and signpost to their website address.
- Refer customers to this information in writing at, or immediately after, the point of sale.
Customers should be able to complain in any reasonable way, for example, by email, phone, post or social media. Your firm must receive, investigate and respond to complaints fairly.
Once a complaint is received, you must:
- Acknowledge it promptly.
- Investigate it diligently and impartially, gathering additional information where needed.
- Assess it fairly, consistently and promptly, taking into account factors including:
- All the evidence available and the circumstances of the complaint.
- Similarities with other complaints received by your firm.
- Relevant guidance published by us, other regulators, and the Financial Ombudsman.
- Financial Ombudsman decisions concerning similar complaints received by your firm.
- Decide whether to uphold the complaint and what remedial action and/or redress may be appropriate.
After 8 weeks of having received the complaint, you must either send a final response letter, or a written response which explains why your firm is not in a position to make a final response. Explain that the consumer has the right to refer their complaint to the Financial Ombudsman.
You must have controls in place to review complaints and deal with them properly. This includes spotting repeat and systemic issues and fixing them where possible, for example, by looking at common causes of complaints and acting to correct them. At a minimum, you should have a simple action plan that shows ongoing improvement of outcomes. Find out more about what we expect in our good and poor practice[1] publication on complaints and root cause analysis.
You must also keep good records of your complaints handling process and share information with us about how many complaints you receive.
Specifically, you must:
- Keep records of each complaint that your firm receives, and what it’s done to resolve it. Retain these for at least 3 years from the date the complaint was received.
- Include complaints data in your FCA complaints reporting. For more information, see section 7[2].
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Case study 7: Responding to complaints promptly and fairly
Context
It’s important that you respond to complaints promptly and fairly so that consumers continue to receive good outcomes, even where things go wrong.
Scenario
A customer contacts a dentist that also acts as a credit broker to finance the cost of treatment. The customer complains about a mistake in the address that was passed to the lender with their application for credit, and asks the firm to investigate it.
Good practice example
When the dentist receives the complaint, it replies promptly, in writing, within 72 hours to confirm that it has received the complaint. It explains who will be dealing with it, what happens next and that it aims to provide a final response within 8 weeks.
The person reviewing the complaint finds that the dentist did make an incorrect record of the customer’s address. They provide a final response explaining that the dentist has corrected its records and informed the lender of the incorrect address. The dentist records the complaint in its internal systems and updates its complaints log. This ensures it meets its reporting obligations and helps the firm identify any patterns or recurring problems, when undertaking a regular complaints review.
Why this matters
Effective complaints handling is essential to delivering good outcomes for customers, including those in vulnerable circumstances. Good record keeping and accurate reporting allow the firm to learn the root cause of issues, improve processes, and deliver better services for customers.
Firms may also need to consider their obligations under UK GDPR and DPA 2018 and consult the Information Commissioner Office’s website[3].
Where to read more
Under DISP 1[4] complaints handling rules, firms are required to acknowledge complaints promptly, investigate the complaint diligently and impartially, and provide a response within 8 weeks and have accurate monitoring and reporting on a regular basis.
Under the Consumer Duty’s cross-cutting obligations, firms are also expected to avoid causing foreseeable harm, which may be identified through complaints the firm receives as well as its other monitoring processes. Firms must act in good faith, including where a complaint identifies that customers have suffered foreseeable harm.
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Case study 8: Using complaints to fix problems and correct what’s causing poor outcomes
Context
This is an example of how a small credit broker can use complaints to stop and fix problems. This is important because under the Duty firms must be able to identify poor outcomes and take action to rectify the causes of poor outcomes.
Scenario
A small home improvements firm which also brokers credit to its customers to pay for its services receives several complaints over a few months from customers who say they felt pressured to complete their applications. As each complaint is handled individually, the recurring issue is not recognised straight away.
Good practice example
The business identifies that several complaints have been logged under this category. A review of customer files and call recordings shows that two members of staff had been using language that could make some customers feel rushed.
To address this, the staff involved receive clear guidance and refresher training on how to communicate in a calm and balanced way. The firm also reviewed call scripts and added prompts to remind staff to give the customer sufficient time to make their mind up.
To prevent the issue happening again, complaints records are improved so that trends can be spotted more easily. A new regular complaints summary is created for senior management, showing the number of complaints, the main themes and the actions taken.
Affected customers are contacted to explain the issue and are offered the chance to revisit their applications if needed.
Why this matters
It is important that firms maintain adequate records and undertake regular internal monitoring so that the root cause of the problems can be identified quickly, helping firms to improve customer outcomes.
Where to read more
DISP 1[4] requires firms to ensure adequate complaints recording, effective root cause analysis and timely action to prevent future issues. It also aligns with the Duty’s expectations to monitor outcomes and act quickly when problems appear. Firms are required to deliver good outcomes for customers, act in good faith and avoid foreseeable harm.
PRIN 2A.10[5] sets out rules for the investigation of foreseeable harm and assessment of remedial action and redress where no complaint has been received. In 2024, we published a Good and Poor Practice report[1] based on reviews of a range of firms’ ‘Root Cause Analysis’ on complaints they received.
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