Could small complaints give you a

big headache?

Bovill briefing

22 October 2015

Neil Walkling & Max Young

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Agenda

1. New complaint handling rules: what’s changing and why?

2. Summary resolution communication

3. Challenges to front-line staff posed by the new complaint-handling

regime

4. Impact of the wider ‘eligible complainant’ definition on firms with

professional clients

5. Changes to complaint reporting

6. Monitoring and control

7. Takeaways

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New complaint handling rules (PS15/19)

What’s changing? Why? When?

More time to handle complaints informally:

3 business days after date of receipt

Allow easier and speedier

resolution of more

complaints

30/6/16

All complaints will be reportable to FCA –

even those resolved informally within 3

business days

Improve completeness,

comparability, and

transparency of data

30/6/16

Issue summary resolution communication if

resolved within 3 business days – including

option of going directly to FOS

Encourage firms to handle

complaints properly first

time – not fob people off

30/6/16

Limit on cost of calls to existing customers

(not just complainants) to ‘basic rate’

Prevent firms from making

money from calls and/or

deterring customers from

calling to resolve issues

26/10/15

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Summary Resolution Communication

Must be issued when the complaint has been informally resolved,

without triggering a full investigation or final response letter

For example:

complaint received Monday

informally resolved COB Thursday

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Prescribed content of communication

• Firm considers the complaint to be resolved

• Can refer complaint to FOS if subsequently decide they are

dissatisfied

• Website address for the FOS, and further info is available there

• Whether firm consents to waive 6 month time limit for referring

complaint to FOS

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Possible extra content in communication

• Encourage customer to refer back to us first if still unhappy (but

must not undermine key message about right to complain to FOS)

• FCA envisages generic template, but firms could choose to add

personalised content (e.g. about the complaint and how it was

resolved)

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What would your clients make of this?

Your recent complaint to ABC Ltd

Dear Customer [Dear Mr X]

The purpose of this notice is to confirm that we consider that your recent complaint to us has been

resolved to your satisfaction.

If you decide that you remain dissatisfied, you have the right to refer your complaint to the

Financial Ombudsman Service (FOS), free of charge – but you must do so within six months of the

date of this letter. The FOS website address is http://financial-ombudsman.org.uk/ and you can

find further information there.

If you are not happy with the way we resolved your complaint, we would appreciate the opportunity to put

things right for you, so please do let us know as soon as possible by calling XXXXXXX on YYYYYYYYY.

We’re sorry that you felt the need to complain in the first place, but we’re grateful to you for bringing the

matter to our attention. We endeavour to provide the best possible service, and welcome feedback from

clients about where we might be going wrong and how we can improve.

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Summary resolution statement: minimalist/ tailored?

Advantages Disadvantages

Encourage

customer to

come back to

firm first, if still

unhappy

Fewer cases reach FOS

Deal with genuine misunderstandings

before they do more damage

Signal to customers that you take

complaints seriously

Quicker resolution and less hassle for

customer?

Was the summary communication

statement really your final response?

Danger of ‘two-stage process’

mentality creeping in

Personalise the

content of the

communication

for each

customer

Standard template may cause

irritation, especially if expectations

not managed

Make customers feel special and

valued – strengthen relationship

May be helpful for audit trail, root

cause analysis, accuracy of

complaints data

Disproportionate extra work/effort to

resolve minor gripes?

Quality control/sign-off issues

Risk of breaching the 3-day deadline

for informal resolution

Effectively a final response letter?

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New challenges for your frontline staff?

Identifying

• More onus to identify which issues raised by customers should be treated as complaints

• Some (mainly larger?) firms already capture MI on informally resolved complaints for root cause analysis

• Possible conflicts of interest (incentives/performance management)?

Reporting

• Decide how to categorise/report the complaint

• System for reporting/collating the data for complaints informally resolved on front line?

Summary resolution

communication

• Check that customer is really satisfied with resolution

• Inform customers and manage expectations about the impending communication

• On the spot decision on whether to treat as complaint or not likely to be required

• Role in issuing the communication?

…on top of resolving the complaint appropriately,

or deciding whether it should be escalated

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What is a complaint?

(a) “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:

(a) Alleges that the complainant has suffered (or may suffer)

financial loss, material distress or material inconvenience;

and

(b) 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”.

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Is this a complaint?

1. Email from client:

Hi Amy

I don’t seem to have received my portfolio statement yet, and it has

normally arrived by this time of the month. Could you let me know

what’s happened to it?

Thanks

2. Telephone conversation with client:

I’m not happy with the recent performance of my portfolio – makes

me wonder why I’m paying you all these fees.

3. Face-to-face conversation with client: their first visit to the office

since it was refurbished:

I don’t like your new layout, I preferred it the way it was. I suppose I’ll

end up paying for this waste of money through higher charges?

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Is this a complaint?

4. Letter from client:

I don’t feel the performance of my portfolio is good enough to justify the

fees I’m paying, so I’ve decided to close my account with you and move

my investments to Butch Cassidy & Partners

5. Telephone conversation with client about ID requirements:

I don’t understand why I need to make a special journey into your office

to show you my passport and bank statements - you’ve known me for 20

years.

6. Face-to-face conversation with client about their experience of dealing

with a call centre based in a particular region of the UK:

I’ve come in to the branch to make the amendments because I’ve given

up trying to deal with your call centre. Their accents are so strong that I

can’t understand a word they say, even after asking them to repeat

everything several times.

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Is this a complaint?

7. Telephone conversation between client and manager of his local office:

Most of your staff are foreigners – you should be employing local people.

Lots of youngsters round here are unemployed.

8. Email from client:

Hi John

Could I have an urgent update on my transaction please? It seems to be

taking forever and you haven’t responded to the chaser email I sent on

Monday.

9. Telephone conversation with client about 15 page suitability report he’s

just received:

Do I really need to read this report? I haven’t got the time or inclination -

you’re supposed to be the expert so I should be able to rely on your

advice without having to wade through an impenetrable tome that you’ve

churned out to keep your compliance people happy.

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Is this a complaint?

10. Email from client:

Hi Mary

Could you give me a call to discuss the invoice you sent recently? I think

you’ve overcharged me.

Thanks

11. Telephone conversation with client about arrangements for financial

advice review meeting:

I really don’t see why you’re insisting that my wife should come along to

the meeting. She’s not interested in the financial stuff, and is happy to

leave it to me to sort out.

12. Telephone conversation with client:

By the way, you forgot to attach the document I need to sign with that

email you sent me yesterday.

Eligible complainants

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Eligible Complainants – FOS net widens

DISP 2.7.9 – Professional clients and eligible counterparties not

considered eligible complainants

NEW ADDITIONAL RULE

DISP 2.7.9A (from 9 July 2015) – the above does not apply to a

complainant who is a consumer relation to the activity in which the

complaint relates

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Are my professional clients ‘consumers’?

Consumer = “a natural person acting for purposes outside their

trade, business or profession”

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Eligible complainants – Key impacts

• Client categorisation and take-on

• Client agreement/TOB

• Complaint handling procedure

• FOS fees and levies

• DISP Rules application

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FCA Reporting – What’s changed?

• Complaints return form – BIGGER!

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Summary of changes to FCA complaint return

Informally resolved

complaints

• Included for first

time

• Complaint and

product categories

mirror those for

formal complaints

More Granularity

• New investment

types added to

return

Other changes to complaint return

• Extra guidance

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FCA Reporting – the timeframes

New return format:

Return due on or after 30th June 2016

Needs to start recording informal complaints from 6 months before

this and ensure you can report right level of detail

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FCA Reporting – Important to note

• Some firms submitting reports of complaints for the first time

• Firms must maintain records for up to five years

• No complaints to report…is this credible?

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Complaints data – inform FCA thematic?

• FCA will expect number of reported complaints to rise

• How can you (or FCA) tell whether you have

implemented the new regime properly?

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Are your staff getting it right?

Staff awareness

Training/briefing records

Policies & procedures

Call listening

End-to-end audit trail:

Identification, categorisation, summary resolution

communication

Timing – 3 day limit?

Client file reviews (e.g. suitability)

Evidence of complaints on file?

Testing

Takeaways

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A few questions to consider

1. How will you train your customer-facing staff on identifying, handling and

recording day-to-day minor gripes that don’t require an investigation

2. How will staff report complaints they resolve on the spot?

3. Who will issue the summary resolution communication, and in what medium?

4. What will your summary resolution statement look like?

5. How can you minimise the risk of the summary resolution statement annoying

your clients?

6. When do you need to start recording informally handled complaints to be ready

to report them for the first time?

7. How are you effected by the wider eligible complainant definition, and what are

you doing about it?

8. How can you test whether the number of informal complaints your firm report

reflects the true picture?