According to the Financial Conduct Authority, 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’. Part of delivering excellent customer service means using customer complaints to improve your business’ products and services. Therefore, all complaints made about your company should be processed fairly, impartially, consistently and promptly. Complaints can be received through a variety of mediums, including by phone, in person or in writing, through the company’s website or by email.

If someone makes a complaint on behalf of someone else, you can accept it, but all efforts should be made to confirm with the complainant that they’re aware of the complaint and have asked for the third party to act on their behalf. You should familiarise yourself with any processes your business has in place to verify and manage complaints made on behalf of a customer.

How should you deal with complaints?

Businesses are obligated to have a Complaints and Compliments Policy under the Financial Conduct Authority’s (FCA) regulations. According to the FCA regulations, ‘effective and transparent procedures for the reasonable and prompt handling of complaints must be established, implemented and maintained’. This means your business must publish a Complaints Policy so that all your existing and new employees can familiarise themselves with the relevant procedures involved with handling complaints.

According to Consumer Outcome 6 in the FCA Handbook, businesses must ensure that it is not difficult for consumers to make claims or complaints. You might consider implementing a feedback survey, though these can be costly and time-consuming. The most effective and efficient way to obtain customer feedback is by implementing an open complaints and compliments policy. This can be achieved by informing consumers that they can leave complaints by phone, in person, in writing, through the company’s website, or by email.

The way complaints are handled varies according to the specific business and sector, however, several procedures are generally accepted as best practice for responding to feedback. For example, the first step you should take following a complaint is logging it on your company’s system. Once it has been digitally recorded, you can consider how to respond. In some cases, an investigation might be necessary.

It’s essential that these processes are specific to the business’ scale and complexity and that complaints can be made free of charge. Requirements regarding complaints are mentioned throughout the FCA Handbook, however, the correct procedure is outlined in most detail in Principle 6:Customers’ interests. According to the FCA, a firm must pay due regard to the interests of its customers and treat them fairly. This means that customers should find it easy to report complaints, and they should be handled impartially, fairly and on time. The two main responsibilities a business has to comply with this principle include:

• To ascertain the scope and severity of the consumer detriment that might have arisen.
• To consider whether it is fair and reasonable for the firm to undertake proactively a redress or remediation exercise.

Having your complaints policy readily available for all existing and new employees will ensure that everyone in the business is properly trained in responding to complaints and compliments. The policy should also be updated regularly, with a set date for a full review recorded on the document.

The 6 stages of logging a complaint

When you receive a complaint, you must create a record of it within your company’s complaints system. This will ensure that you manage it within the policy timeframe. It also helps you to keep an accurate record of the complaint and any resulting investigation and its outcome. This way, you can identify any improvements that are needed to ensure the same issue doesn’t occur again. There are usually six stages of logging a customer complaint:

1. Stage 1: Your organisation may also use a spreadsheet, database or another system for managing its complaints, so you should check your organisation’s policy. Some businesses use a customer relationship management system (CRM), which is accessed through the Intranet.
2. Stage 2: Any employee who receives a complaint should log it on the system or report it to the relevant department so they can log it onto the system and respond.
3. Stage 3: When logging a complaint, make sure you capture the following information:
   • Customer name, address and contact details.
   • A summary of the complaint.
   • The data the complaint was received.
   • How the complaint was received.
   • What the desired outcome is.
4. Stage 4: You then need to acknowledge receipt of the complaint. This should usually be done within 5 working days. Most businesses will have standard letter templates available.
5. Stage 5: Once you’ve sent the acknowledgment letter, you should update the complaints log in the system with the data of acknowledgment.
6. Stage 6: If the complaint is serious, it might need to be investigated before you can send a full response

How to investigate a complaint

Complaints often need further investigation before they can be resolved. You may need a manager to review the service that has been complained about so that they can determine whether it meets the business’ quality standards. It’s important to familiarise yourself with the timeframes your company has in place to carry out investigations and respond to complaints, as they differ across businesses and sectors. If you can’t resolve the complaint within this timeframe, you should contact the complainant to update them and provide a revised date for resolution.

Any correspondence with the complainant along with any investigation findings should be logged against the complaint on the system. If a complainant is unsatisfied with the outcome of a complaint, they might ask you to review it. Here is a typical example of an organisation’s processes for handling escalating complaints:

• A Director or Senior Manager who has not previously been involved with the complaint must review the case and decide whether to escalate it to a review panel.
• A response should be sent to the complainant within a set timeframe if their case is not escalated, explaining why, and the case is then closed.
• Any complaint that is escalated to the review panel will be reviewed by a Board Member, resident representative and a Director/Senior Manager, who will aim to respond to the complainant within a set timeframe.

According to the FCA, when a business recognises a complaint as representing a recurring or systematic problem within the company, it must take appropriate and proportionate measures to ensure that customers are given appropriate redress. In such cases, it might also be necessary to contact customers who might have been affected by the issue, even if they haven’t complained about it themselves. In some situations, you may need to offer compensation. Most businesses will have a separate Compensation Policy for this. After the complaint has been closed, you should carry out a satisfaction survey. This will help you evaluate and improve the effectiveness of both your business’ services and your procedures for handling complaints.

Why is it important to deal with complaints properly?

Complaints are an efficient way to collect feedback on areas of service and business performance that require improvement as they offer you an invaluable insight into your products and services. The more you understand your customers’ needs and qualms, the better the service you’ll be able to provide them with. It’s important to pay close attention to every complaint you receive. Even if it seems like an isolated incident, there could be many other customers who experienced the same thing but didn’t speak up. By evaluating these concerns, you can troubleshoot problems before they escalate.

If you respond to a complaint effectively and efficiently, customers are more likely to feel appreciated and valued by the business, which increases customer loyalty. This also contributes to positive brand reputation, as a satisfied customer might well refer your service to their friends and family. Word-of-mouth recommendations are invaluable and free as individuals are more likely to trust praise if it’s coming from a reliable and experienced source.

You may even consider implementing feedback surveys. However, these can be time-consuming with little uptake. The best way to obtain customer feedback is by endorsing open complaints and compliments policy. This can be achieved by promoting various mediums for customers to leave their feedback, for example, through the company website.

Failure to respond to complaints properly can have a detrimental effect on a business’ productivity and reputation. If customers notice that their feedback has not been responded to, they’re extremely likely to turn to a competitor. In some severe cases, the customer might even report your business for misconduct. If an organisation is found guilty of failing to comply with their regulations, the FCA has criminal, civil and regulatory enforcement powers to protect consumers. For example, they can withdraw a firm’s authorisation, issue fines and impose criminal prosecutions. Therefore, to maintain customers’ confidence in your business and avoid fines and prosecution, organisations must know how to properly respond to complaints.