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  1. Point in time
    2005-06-30

SIFA 11.1 How to handle a complaint

SIFA 11.1.1G

There are many reasons why clients complain to firms. However, not all problems are grounds for complaint (e.g. poor investment performance alone is not normally grounds for a complaint). Typically, complaints arise where:

  1. (1)

    a firm makes unexpected or excessive charges;

  2. (2)

    a firm does not draw attention to a particularly strict condition in a contract;

  3. (3)

    a firm does not give a client adequate notice about changes to a contract;

  4. (4)

    a client loses money because of a firm's slow administration; or

  5. (5)

    a firm does not warn a client adequately about the risks of a product.

SIFA 11.1.2G

If you receive a complaint from or on behalf of an eligible complainant (usually a private customer) about your firm's provision of, or failure to provide a financial service, you will need to follow certain procedures.

SIFA 11.1.3G

An example of an eligible complainant is a private individual. Private individuals can refer a complaint to the Financial Ombudsman Service (FOS) if they are unhappy with a firm's final response.

SIFA 11.1.4G

Your procedures must cover:

  1. (1)

    receiving complaints;

  2. (2)

    responding to complaints;

  3. (3)

    the appropriate investigation of complaints; and

  4. (4)

    notifying complainants of their right to go to the FOS where relevant.

SIFA 11.1.5G

You must have in place and operate appropriate and effective internal complaint handling procedures for handling any expression of dissatisfaction, whether oral or written, justified or not. The procedures must be written down.

When and where should you publicise your procedures?

SIFA 11.1.6G

The requirements are as follows:

  1. (1)

    You must 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.

  2. (2)

    At or immediately after the point of sale, your firm must refer your clients in writing to the availability of your internal complaint handling procedures - for example, in your terms of business.

  3. (3)

    If you receive a complaint (unless it is resolved by close of business the next day) or receive a request for a copy of the procedures, you must supply a copy of the complaint handling procedures to the complainant.

  4. (4)

    All of your employees should be aware of the procedures.

How quickly do you need to deal with a complaint?

SIFA 11.1.7G

You will want to resolve complaints quickly and efficiently, though the length of time that it will take you to investigate a complaint may vary. There are fixed periods within which you have to inform your client of your progress:

SIFA11.1.7graphic_G1
SIFA 11.1.8G

The steps are explained in more detail below:

Step 1

Within five business days

- send a copy of your internal complaints procedures; and

- inform them who will be handling the complaint.

Step 2

Within four weeks

Send a final response with a copy of leaflet regarding FOS covering:

- A summary of the complaint

- Details of any offer made

- Right for your client to go to FOS

- A summary of your investigation

- Time limit on any offer made

- Six-month time limit for referrals to FOS

(It should be a separate document and written in plain English)

Or send a holding response

Explaining why you are not yet in a position to resolve the complaint and indicating when you will make further contact with the client.

Step 3

Within eight weeks

Send a final response

As per the details in step 2 above

Or a response explaining:

- Why you are not able to respond

- When you expect to provide a final response

- Explain that client is entitled to refer the complaint to FOS if unhappy with the delay

- Reasons for the delay

- Give copy of leaflet regarding FOS

- Six-month time limit for referrals to FOS

Exception to the rules: quick resolution of complaints

SIFA 11.1.9G

If you manage to deal with a complaint by the end of the next business day after receiving it, there is no need to supply your client with a copy of the complaints procedures.

SIFA 11.1.10G

Complaints that are resolved by the next business day do not fall under the requirements for:

  1. (1)

    time limits;

  2. (2)

    record keeping; or

  3. (3)

    reporting.

Where are the relevant Handbook sections?

SIFA 11.1.11G

Complaints handling procedures are explained fully in chapter 1 of the Dispute Resolution sourcebook (DISP). The sections cover:

  1. (1)

    the general and additional requirements: DISP 1.2;

  2. (2)

    additional requirements for internal complaint handling procedures: DISP 1.3;

  3. (3)

    the time limits for dealing with a complaint: DISP 1.4; and

  4. (4)

    who should deal with a complaint: DISP 1.2.16 R.

Record keeping requirements

SIFA 11.1.12G

You must keep records for a minimum of three years from when you receive a complaint. 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 later referred to them.

SIFA 11.1.13G

Information about a complaint that you should keep

The name of the complainant.

The substance of the complaint.

Copies of correspondence between your firm and the complaint.

Details of any redress offered by your firm.
SIFA 11.1.14G

The following section of this Overview is also relevant:

•'Complaints reporting to the FSA' - Chapter 11.2.