Unit 4 / Section 5 - Handling Compliants

Question 1

What barriers may customers perceive to exist w.r.t. making a complaint?

Answer 1

• Customer assumes that they will not be able to get through to a person on the telephone
• Customer expects the complaint to be handled poorly because poor standards have led to the complaint in the first place
• Customer expects the complaint handling process to take too long
• Some customers may believe they will suffer some form of retribution by the company for lodging the complaint

Question 2

Who is PCBS?

Answer 2

Parliamentary Committee on Banking Supervision

Question 3

What did the PCBS recommend that the FCA did, which subsequently resulted in complaint handling changes in July 2015?

Answer 3

The FCA should take steps to ensure that banks take complaints seriously. There should be increased transparency to empower consumers.

Question 4

What 4 key changes were made to the existing complaint standards in July 2015:

Answer 4

1) Requirement to respond to the customer by the close of business on the next working day following receipt of the complaint was extended to needing to ensure it is sent within three working days.
2) A summary resolution communication (SRC), including Financial Ombudsman Service (FOS) rights, to be sent to all complainants.
3) The availability of a basic rate call telephone line for complainants to use.
4) All complaints received must be reported, rather than just those which are unresolved at close of business on the working day after receipt.

Question 5

What is the FCA definition of a complaint?

Answer 5

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 … which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.

Question 6

What are two approaches firms may take to implement the complaints definition?

Answer 6

1) Front-line Staff - train to distinguish between and log material and non-material complaints at point of receipt.
2) System or rules-based approach - add simple data fields to front-line capturing process within complaints recording systems.

Question 7

What does ‘material distress’ mean in practice?

Answer 7

1) Financial loss:- The customer has lost out financially as a result of the firm’s mistake.
2) Distress and Inconvenience (D&I):- Firms must decide how they approach this subject.

Question 8

What are 5 key conduct questions to be asked when considering how well complaints are handled by front-line staff?

Answer 8

1) Does the complaints department always put the customer first?
2) Is more information and insight captured than just the absolute minimum reporting requirement?
3) Are the right people recruited for the role, and is their training kept up to date and relevant?
4) Is there an ideal mix of different training styles and methods of delivery?
5) Are staff sufficiently motivated by their learning and development?

Question 9

What are 5 risks arising specifically as a result of poor complaint handling conduct?

Answer 9

1) Failure to do what is required by the FCA
2) Firms not being able to respond to innovation or new technology, and therefore not able to respond to the customer in the way they want
3) Firms not recognising vulnerable customers and therefore being unable to handle their complaints in a way which is appropriate to their individual circumstances
4) Inadequate management information (MI) but too much data being produced and distributed. MI is analysis of data, and analysis leads to a better understanding of the implications of the way the firm conducts itself
5) Failure to understand what a good outcome is, for whom it is a good outcome, and consequently being able to report fair outcomes have been achieved