Complaints Handling in the post-Consumer Duty world
In our experience, complaints are often seen as challenges. They can feel like a burden; something to do to comply with FCA requirements. But through the Consumer Duty lens, handling complaints positively offers lots of benefits. They can highlight problems early on, before they become costly. They give us the opportunity to build customer confidence and make small adjustments that could make huge positive changes to actual customer outcomes.
Complaint cases are on the rise, so how we handle them matters. The FCA will also be using complaints data to measure elements of the Consumer Duty, like fair value and the quality of customer support.
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Financial Ombudsman Service statistics reflect this rise; their latest quarterly complaints data shows an increase of 70% compared to the same quarter (Q2) in 2023/24. This could well be due to two major factors; the use of professional representatives (up by around 25% on the previous year) and the well-publicised motor finance issues.
But this isn’t the whole story - complaints about credit cards have seen a huge increase (of 333% - around the same increase as for motor finance complaints), the majority around irresponsible and unaffordable lending.Â
In light of increasing complaints numbers, fair treatment and good outcomes are especially important. By definition, the customer is alleging that the firm’s actions have impacted them negatively. To ensure good outcomes, their complaint must be resolved fairly, swiftly and transparently. So far, so in line with DISP?
The Consumer Duty means that the complaints process needs to genuinely meet the customer’s best interests. This shifts the focus to ensuring that the outcome of the complaint resolution is fair. It isn’t enough to follow the correct process, the end result must show that the customer has received fair value and quality service. This might mean reviewing the entire journey for the customer, not just the specific issue at hand. If the complaint is about a specific charge, the investigation needs to look at whether the charge was applied fairly given the customer’s overall relationship with the firm. If there is evidence of a wider problem – such as poor communication about fees – then that should be addressed as part of the resolution.Â
Post-Consumer Duty, firms are expected to take more responsibility for identifying potential complaints before they escalate. This means that all staff must be trained to recognise early signs of dissatisfaction and engage with the customer to support them, acting quickly to put right anything that’s gone wrong.
Further up the chain, complaints should trigger a review of whether the product or service delivered was of fair value to the customer. Where the parameters on the review trigger lie will depend on the product and the nature of the complaints, but in general, a pattern of complaints relating to value should mean a reassessment of pricing structures and/or the suitability of products and services.
Regular, engaging training on identification of complaints and support of customers making a complaint is only getting more important. Our online Complaints Handling course provides everything that your staff needs to know to identify and investigate complaints, and support customers in an easy to understand, relatable way. Priced at £20, the course is accessible at the user’s convenience and provides a certificate upon successful completion.
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