Recently the FCA published the results of its thematic review on complaints and complaint handling after liaising with 15 separate businesses, 5 trade bodies and consulted the Financial Ombudsman, assessing how they receive, resolve, record and measure customer complaints, seeking to understand what prevents firm’s from fully considering the needs of the consumer. Essentially they looked to ensure that there were no barriers to effective complaint handling and that the firm’s culture and behaviours had been structured to achieve the best customer outcome.
The FCA states complaints are high on their radar saying “Ensuring that firms treat their customers fairly is at the heart of our consumer protection agenda. It is vital that customers know that if something goes wrong, their complaint will be dealt with in a reasonable way and that they will get a fair outcome”
The results of this review showed that whilst businesses have a clear understanding of what constitutes a complaint, how to resolve it, their obligations regarding time limits and keeping the customer informed. There were differences in what happened after handling of redress, analytics of root causes and Senior Management oversight varied.
Interestingly the FCA observed a lack of individuality when dealing with cases, with firms playing safe and opting to stick to a tick box formula to guarantee compliance with the as yet untested FCA requirements. Their concerns were that such a one size fits all process would result in a robotic customer experience and therefore jeopardise a truly fair customer outcome. That’s not to say that they didn’t suggest some standardisation but that to truly resolve the complaint to the customers total satisfaction even when it doesn’t go the customers way, there needed to be some tailoring on a case by case basis to ensure all aspects are considered.
In the 2013/14 review by the Financial Ombudsman Service (FOS), only 1% of complaints during that period were against businesses holding a consumer credit licence, and of that 1%, half of the complaints made were actually upheld. The total number of complaints specifically related to debt collection stood at 557 for the year ended March 2014 a fall of 32% year on year. This is out of a total number of enquiries and complaints received by the ombudsman of almost 2.4 million. This would indicate that those of us under FCA supervision are working hard not to create complaints in the first place.
What has become clear is that firms need to put complaints handling as a core activity of their business and ensure they are covered by a thorough cradle to grave process, checking them in and counting them out and fully auditable. Most importantly with lessons learned to prevent or correct recurrences, bad practices or behaviours. By recording everything properly we can fully understand what went wrong and put in changes to remedy the root cause whether it’s training or new software, if you know why people are complaining you can and must do something about it.
When you think about it complaints are a reverse customer care survey, they tell you what you are doing wrong rather than what you are doing right, valuable information indeed!
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