Comprehensive guide to handling FCA-regulated complaints: Complaint definition


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Published
Jul 2nd '24
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Introduction to complaint definition and handling for FCA-regulated activities

Handling complaints effectively is crucial for maintaining trust and compliance within the financial services sector. The Financial Conduct Authority (FCA) has stringent guidelines for managing complaints, ensuring that financial service providers uphold the highest standards of customer service and regulatory compliance.

 

This guide delves into the essential aspects of FCA-regulated complaint handling procedures, providing a comprehensive framework for addressing and resolving complaints.

 

FCA complaint definition

According to the FCA, the complaint definition is any expression of dissatisfaction, whether oral or written, regarding the provision of, or failure to provide, a financial service. A valid complaint typically involves allegations of:

 

  • Financial loss: monetary harm incurred by the complainant.
  • Material distress: significant emotional or psychological stress experienced due to the financial service provided.
  • Material inconvenience: substantial disruption or inconvenience caused to the complainant.

 

Understanding the precise nature of complaints is the first step towards addressing them effectively.

 

Format of complaints

While complaints can be made via email, telephone, or in person, a written letter or email often allows for a more structured and comprehensive presentation of the issues. This format facilitates thorough documentation and tracking of the complaint.

 

Investigating complaints

 

Investigation process

Upon receipt of a complaint, the risk &/or compliance officer (or a delegated individual or team) undertakes a detailed investigation.

 

If your company is small, it may be worth outsourcing your complaints to specialists like ourselves, so you can continue working in what you are good at.

 

The benefits of independent complaints management are:

 

  • Access to specialised expertise: specialist compliance consultants bring in-depth knowledge of regulatory requirements, ensuring accurate and efficient complaint management
  • Additional resources: outsourcing provides additional manpower and technological resources, which can enhance complaint handling capabilities.
  • Time savings and increased productivity: by delegating complaint management, businesses can save time and focus on core activities, leading to increased overall productivity
  • Improved systems: specialists can implement and manage advanced complaint management systems, ensuring efficient and effective resolution processes.
  • Cost efficiency: outsourcing can be more cost-effective than maintaining an in-house team, reducing overheads and operational expense.
  • Stay updated with regulations: specialist providers keep abreast of regulatory changes, ensuring your business remains compliant with the latest standards.
  • Enhanced focus on core business: outsourcing allows businesses to concentrate on their primary operations, driving growth and innovation.

 

The goals of any investigation should be to:

 

  • Assess fairly: ensure impartial evaluation of the complaint.
  • Consistent handling: apply uniform standards across all complaints.
  • Prompt resolution: aim to resolve complaints within 8 weeks of receipt.

 

Referring complaints to other firms

If a complaint involves another firm or is jointly related to multiple firms, it will be promptly referred to the relevant entity. The complainant will be informed of this referral and provided with the contact details of the other firm.

 

Communication and timescales

 

Acknowledgment of complaints

Complaints are acknowledged in writing within 5 business days. This acknowledgment includes detailed information on the firm’s complaint handling procedures. If a final response can be provided immediately, it will be included in the initial acknowledgment.

 

Final or other responses within 8 weeks

Within 8 weeks, the complainant will receive either:

 

  • A final response detailing the outcome of the investigation, or
  • An interim response explaining the delay, reasons for it, and an estimated timeline for the final response.

 

Final response details

The final response will either uphold or reject the complaint, providing clear reasons for the decision. Additionally, it will inform the complainant about the possibility of referring the matter to the Financial Ombudsman Service (FOS) if they remain dissatisfied.

 

Referring complaints to the Financial Ombudsman Service

Should the complainant be unsatisfied with the final response, they may refer the complaint to the FOS within 6 months. The FOS can be contacted at:

 

Financial Ombudsman Service
South Quay Plaza, 183 Marsh Wall,
London E14 9SR
Tel: 0845 080 1800
(https://www.financial-ombudsman.org.uk)

 

Conclusion

Effective complaint handling is a cornerstone of compliance and customer satisfaction in the financial services industry. By adhering to FCA guidelines and maintaining transparent, fair, and prompt procedures, firms can enhance trust and uphold their regulatory obligations.

 

Contact us if you need assistance in implementing, documenting or testing/auditing your complaints management project

 

Contact us

 

Related: FCA Complaint Handling

 

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