This chapter explains how your firm is required by our rules to handle complaints from your customers. It also explains that our rules require mortgage and insurance intermediaries to submit regular complaints reports to us so that we can monitor firms' regulatory compliance. The rules are in Dispute Resolution: Complaints (DISP).
If your firm receives a complaint from, or on behalf of, an eligible complainant about the way in which your firm has conducted its business, our rules require you to follow certain procedures. Broadly, an eligible complainant is a private individual or a business with an annual turnover of less than £1 million. There is a full list of eligible complainants in DISP 2.4.3 R. (DISP 1.1.7 R explains how to notify us if your firm does not conduct business with eligible complainants.) Eligible complainants can refer a complaint to the Financial Ombudsman Service (FOS) if they are unhappy with your firm's final response or if the firm is not in a position to give a final response after 8 weeks. (See Part I, Chapter 18 for more on the FOS.)
Your firm is required to have in place and operate appropriate and effective procedures for handling any expression of dissatisfaction from an eligible complainant, whether oral or written, and whether or not you think the complaint is justified. The general requirements to have internal complaints handling procedures are set out in DISP 1.2. The procedures must be written down and must cover:
receiving complaints;
responding to complaints;
the appropriate investigation of complaints; and
notifying complainants of their right to go to the FOS where relevant.
DISP 1.2.16 R explains who in the firm should deal with complaints.
Insurance intermediaries are also required to have in place and operate effective procedures for registering and responding to any expression of dissatisfaction received from, on or behalf of, someone who is not an eligible complainant and which relates to insurance mediation activity carried on by the firm (for example a complaint from a large corporate customer) (DISP 1.2.1A R). Note, however, that this procedure only needs to cover complaints about how your firm carries on insurance mediation activities. It does not, for example, need to cover complaints arising out of contractual disputes your firm may have about an agency agreement with an insurance company.
The requirements are as follows (see also DISP 1.2.9 R to DISP 1.2.15 G):
You have to display a notice stating that the FOS covers your firm. The notice should be displayed in all of your branches or offices to which your customers have access.
At or immediately after the point of sale, your firm has to refer your customers in writing to the availability of your internal complaint handling procedures - for example, in your initial disclosure documents, status disclosure or policy summary.
If you receive a complaint (unless it is resolved by the close of business the next day) or a request for a copy of the procedures, you have to supply a copy of your complaints handling procedures to the complainant.
All of your employees need to be aware of the procedures.
You will want to resolve complaints quickly and efficiently, though the length of time that it takes you to investigate a complaint may vary. Under our rules, there are fixed periods, summarised in the flowchart below, within which you will have to inform your customer of your progress (full details of the time limits for dealing with complaints are in DISP 1.4):
The applicability of the complaintshandling rules and the FOS isnot limited to complaints that relateto the activities of your firm after NM or NGI. Thecomplaints handling rules and the FOS also apply where the activity to which the complaint relates occurred before NM (in relation to mortgage mediation activities) or NGI (in relation to insurance mediation activities), provided that:
the complaint is made after NM or NGI (whichever is relevant);
the firm concerned was a member of the Mortgage Code Compliance Board (MCCB) prior to NM or the General Insurance Standards Council (GISC) prior to NGI at the time the activity occurred; and
the complaint is made by a complainant who is eligible under the relevant legislation (this will vary depending on whether the firm was a member of MCCB or GISC - the legislation is available at www.legislation.hmso.gov.uk/si/si2004/20040454.htm).
You are required to keep a record for a minimum of three years from when you receive a complaint from an eligible complainant . This is so that you meet our requirements and are able to co-operate with FOS if they ask for information about a complaint that is referred to them. The record should include the following information:
Under our rules, you need to send in a complaints report unless your firm only conducts business with clients who are not eligible complainants (which will be unlikely for small mortgage and insurance intermediaries) (DISP 1.1.7 R). Reports must be submitted electronically (see DISP 1.5.10 R to DISP 1.5.10A R), must cover the information in DISP 1.5.4 R and be in the format set out in DISP 1 Annex 1R
You are required to send a report to us twice each year within 30 business days of the end of the relevant reporting period. The reporting periods are:
There are transitional arrangements governing when mortgage and insurance intermediaries must submit their first and secondcomplaints reports if they become authorised before 1 April 2005. The transitional provisions, which relate to DISP 1.5.4 R, can be found in the table at DISP TP 1.
Reports must be submitted electronically. The 'About E-Regulation' section in the 'Industry Help' area of our website (www.fsa.gov.uk) explains how you report to us electronically.
