Financial Conduct Authority 15November 2014
TR14/18Complaint handling
We identied inconsistency in rms’ denition of a complaint
• Firms generally adopted a conservative – and broader – approach to dening what
constituted a ‘complaint’ under our rules. This has consequences for what rms
report to us in their biannual complaints return.
To determine whether a customer has raised a complaint or not, we asked senior managers
to confirm what definition their staff used to identify a matter as a complaint. Firms gave a range
of definitions, with almost all indicating they used a wider definition than the one specified
in our rules.
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Some senior managers said the definition of complaint in DISP was complex and
subjective. For example, firms said their staff found it difficult to identify ‘material’ distress or
‘material’ inconvenience. As a result, to ensure they do not miss any regulatory complaints
firms often adopted a broader definition of complaint – that of ‘any expression of dissatisfaction’.
The firms included in our review were eager to capture all expressions of dissatisfaction (thus
including in their regulated complaints process complaints which technically fall outside our
definition otherwise known as ‘non-regulatory’ complaints). However, this results in a lack of
consistency between firms, making comparisons between them difficult.
Non-regulatory complaints, such as those that could be dealt with swiftly and by front line staff,
could be treated alongside regulated complaints in which there is a claim that financial loss or
material distress or material inconvenience has occurred. By their nature, these more complex
complaints require more investigation and a more in-depth response. As a result, firms that treat
non-regulated complaints as regulated complaints could inadvertently be putting customers into
a more formal process than necessary. For example, a consumer may have only been seeking an
apology for the length of counter queue in branch (a non-regulatory complaint
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); but end up in
the formalised regulated complaints process to ‘resolve’ and remedy the cause of the complaint.
The consumer may have to wait for a formal apology and an explanation of the reason for the
counter queue when all they wanted was the apology and an acknowledgement of the issue –
neither of which required the full formal process. Again, there needs to be a full consideration of
what is in the consumer’s best interests.
The inconsistency of firms’ complaint definitions may also have implications for any peer group
comparisons as discussed below.
We found inconsistencies in the complaints data rms reported to us in the
complaints return
Firms’ choice, of both operating model and definition of complaint, impacts on the data which
they report to us twice a year in their complaints returns. As highlighted above our review
identified possible inconsistencies in the data firms reported. This may make it more difficult
to carry out meaningful peer group analysis between firms. Our work with consumer bodies
made us aware that the distinction between reportable and non-reportable complaints
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is also
not well understood.
17 The FCA handbook defines a complaint as:
‘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 alleges that the complainant has suffered (or may suffer)
financial loss, material distress or material inconvenience and 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.’ The MiFID definition is similar, but ends at ‘material inconvenience.’
18 Assuming this did not cause financial loss, material distress or material inconvenience.
19 Only complaints which are not resolved by the close of next business day need to be reported (DISP 1.5.1.R.)