Complaints Policy – Handling Procedures

1. INTRODUCTION

1.1 Background

The objective of these procedures is to ensure that FOS regulated complaints are dealt with in accordance with the Rules and at the earliest possible stage, but in any event within the required timescales, which are specified in the relevant sections.

1.2 Purpose

The purpose of this procedure manual is to evidence the end-to-end process for effectively processing, investigating and controlling complaints received.  The manual is an important control document and covers both regulatory and business requirements.

The FCA’s rule (DISP 1.2.1 R) states:

“A firm must have in place and operate appropriate and effective internal complaint handling procedures (which must be written down) for handling any expression of dissatisfaction, whether oral or written, and whether justified or not, from or on behalf of an eligible complainant about that firm’s provision of, or failure to provide, a financial service”.

These procedures meet this requirement and have the primary aims to ensure that anyone who handles a complaint can:

  1. Understand our obligations;
  2. Recognise and deal with a complaint in order that we comply with the Financial Services Authority rules;
  3. Understand the requirements and controls for dealing with a complaint effectively and efficiently (including interaction with complainants and third parties)
  4. Treat customers fairly
  5. Comply with FOS requirements;

This document details our procedure for handling complaints.  It demonstrates our commitment to our customers and ensures that we handle complaints in a consistent manner.

1.3 Assumptions

The following assumptions have been made in relation to the complaints handling process:

  1. All staff are sufficiently trained and competent to undertake their roles which are clearly defined;
  2. These procedures will be reviewed as necessary (at least annually) to ensure they remain up-to-date with current practice and regulatory requirements;
  3. Grzegorz Konfederak or Krzysztof Krupecki will identify trends in complaints, including any systemic failure and implement remedial actions.

1.4 Introduction To Complaint Handling

The FCA define a complaint as “any expression of dissatisfaction, whether oral or written from or on behalf of a complainant who has suffered, a financial loss or material inconvenience, about a provision or failure to provide a financial service”.  The complainant can be a private individual or a small business and certain third parties are also covered by the regulations.

It is a basic tenet that regulatory complaints are investigated in an independent and impartial manner and it is imperative that these procedures and associated regulatory rules are complied with.

The sections below provide clarification on some of the standards that we adopt with regards to complaints received:

Pre-Financial Services Act 1986 – this is a pre-Act complaint, the Financial Ombudsman Service may not consider the complaint (although we can’t comment on jurisdiction on behalf of the FOS).

Voluntary Jurisdiction – The Firm does not subscribe to Voluntary Jurisdiction, therefore, any complaints that fall into this category, will not be reviewed.

Pre-regulation Mortgage Complaints (before 31/10/04) – If the financial service was not undertaken through the Firm, then this will not be reviewed.

Pre-regulation General Insurance (before 14/01/05) – If the financial service was not undertaken through the Firm then this will not be reviewed.

Complaints about fund performance – The FOS do not deal with complaints that are purely about fund performance, however, the FOS do reserve the right to proceed with any complaint that involves an allegation of negligence or maladministration.

Time barring – The Firm should consider whether this is still a relevant complaint if the product provider has implemented a time-bar.

2. REGULATION

2.1 Financial Conduct Authority (FCA)

The Financial Conduct Authority (FCA) has rules that the Firm must follow.  These rules are there to ensure that we handle our complaints in a timely, effective, fair and consistent manner.

2.1.1 Principles for Businesses

There are 11 high-level principles, which apply to all Financial Services firms, those most relevant to the complaints process are:

(1)          A firm must conduct its business with integrity;

(2)          A firm must conduct its business with due skill, care and diligence;

(3)          A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems;

(5)          A firm must observe proper standards of market conduct;

(6)          A firm must pay due regard to the interests of its customers and treat them fairly;

(7)          A firm must pay due regard to the information needs of its clients, and communicate information in a way which is clear, fair and not misleading;

(9)          A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgement;

(11)        A firm must deal with its regulators in an open and co-operative way, and must disclose to the FCA appropriately anything relating to the firm of which the FCA would reasonably expect notice.

2.1.2 Treating Customers Fairly

The FCA’s initiative to ‘treat customers fairly’ is particularly relevant when looking at the complaints process.  The Firm must ensure that a fair, unbiased analysis of customer’s complaints is conducted, which is then communicated to them in a clear and not misleading manner, whilst completing the process efficiently and without undue delay.

2.1.3 Dispute Resolutions

In addition to these high-level principles, the FCA’s Dispute Resolution: Complaints (DISP) Sourcebook provides detailed rules and guidance on how Firms’ complaint handling must operate.

2.1.4 Key FCA Dispute Resolution Rules

Rule Rule Description
DISP 1.2.1 R A firm must have in place and operate appropriate and effective internal complaint handling procedures (which must be written down) for handling any expression of dissatisfaction, whether oral or written, and whether justified or not, from or on behalf of an eligible complainant about that firm’s provision of, or failure to provide, a financial service.
DISP 1.2.16 R A firm’s internal complaint handling procedures under DISP 1.2.1R must make provision for:

1)    complaints to be investigated by an employee of sufficient competence who, where appropriate, was not directly involved in the matter which is the subject of the complaint;                         

2)    the person charged with responding to complaints to have the authority to settle complaints (including the offering of redress where appropriate) or to have ready access to someone who has the necessary authority; and                                                      

3)    responses to complaints to address adequately the subject matter of the complaint and, where a complaint is upheld, to offer appropriate redress.

DISP 1.2.17 R Where a firm decides that redress is appropriate, a firm must provide a complainant with fair compensation for any acts or omissions for which it was responsible and comply with any offer of redress which the complainant accepts.
DISP 1.4.1 R A firm must send a written acknowledgment of a complaint within five business days of its receipt, giving the name or job title of the individual handling the complaint for the firm (together with details of the firm’s internal complaint handling procedures).
DISP 1.4.4 R A firm must, within four weeks of receiving a complaint send the complainant either:

1)   a final response; or

2)   a holding response, which explains why it is not yet in a position to resolve the complaint and indicates when the firm will make further contact (which must be within eight weeks of receipt of the complaint).

DISP 1.4.5 R A firm must, by the end of eight weeks after its receipt of a complaint, send the complainant either:

1)   a final response; or

2)   a response which:

a)   explains that the firm is still not in a position to make a final response, gives reasons for the further delays and indicates when it expects to be able to give a final response; and

b)   informs the complainant that he may refer the complaint to the Financial Ombudsman Service if he is dissatisfied with the delay, and encloses a copy of the Financial Ombudsman Service explanatory leaflet.

DISP 1.5.1 R A firm must make and retain records of complaints…for a minimum period of three years from the date of its receipt of the complaint.
DISP 1.6.1 R A firm must cooperate fully with the Ombudsman in the handling of complaints against it.

2.2 Financial Ombudsman Service (FOS)

The Financial Ombudsman Service (FOS) is not a regulatory body, however, they were set up by law to help settle individual disputes between consumers and financial firms.  As such, firms are required to cooperate fully with the Ombudsman in the handling of complaints.

A complainant must complain to the firm responsible for giving advice first, prior to taking their complaint to the Ombudsman.  Once a firm has completed its review of a complaint and sent the final response letter to the complainant, they then have 6 months from the date of this letter to refer it to the FOS.

Typically, FOS will then request the file from the firm and conduct an independent review and charge a case fee.  If either the complainant or the firm disagree with the Adjudicator’s decision, then it will go to an Ombudsman for a final decision, which must be accepted by the firm.  The complainant, however, could take this to court.

3. DOCUMENTATION REQUIRED

Document/Purpose
Leaflet – Complaints Standards.

The Firm’s leaflet detailing complaints handling standards to be given to anyone who requests it, also to be enclosed with the acknowledgement letter.

Notice – Complaints and the Financial Ombudsman Service

To be displayed in every office where members of the public have access.

Complaint Handling Procedures Policy Confirmation form

To be signed by all staff once the Complaints guidance and Complaint Handling procedures have been read and understood.

Complaint Register

For recording details of all complaints received.

Verbal Complaint Record

For recording details of any complaints received verbally

Professional Indemnity Notification Form

To be completed and submitted to the insurers for notification of a possible claim

Acknowledgement Letter

Issued to confirm receipt of the complaint and complaint handling procedures.

Authority letter – to be sent with the acknowledgement letter, to obtain client authority to contact third parties should it be required.
Confirmation to Financial Ombudsman Service (FOS) letter – to be used if a complaint is received via the FOS, confirming an investigation will be carried out.
“4 week” letter – issued if the complaint has not been resolved within 4 weeks of the date of receipt.

“8 week” letter – issued if the complaint has not been resolved within 8 weeks of the date of receipt.

Final response letter – example format for final response letter.

Form of discharge – to be issued with the final response letter if redress is offered.

Submission letter – to be used to confirm and accompany the documentation to be submitted if a complaint is referred to the FOS.

TEMPLATES FOR THESE DOCUMENTS ARE CONTAINED IN THE COMPLAINTS FORMS SECTION OF THE REGULATORY SPECTRUM/TEMPLATES & FORMS ON THE SESAME DIRECT WEB-SITE

4. COMPLAINTS INVESTIGATION

4.1 Receiving a complaint

Complaints can be received via many sources e.g. mail, verbal instruction, e-mail, fax, personal visit.  These can be received direct from your customer, the FOS, or a third party company (solicitor, family member, etc). The following steps must be taken upon receipt of a complaint being received:

Verbal Complaint:

Upon receipt of a verbal complaint, complete a Complaint record, detailing date, name, address and tel. no. of complainant (and client, if different), nature of complaint, adviser (if known), also document the name & title of staff member receiving the complaint.  Once complete, sign and date the record and ensure it is passed immediately to the Compliance Oversight Officer.

Written Complaint (letter, fax, email):

On receipt of a written complaint, ensure it is passed immediately to the Compliance Oversight Officer who is responsible for the compliant investigation.

 4.2 Acknowledgment

Issue an acknowledgement letter, using the appropriate template letter, to the client within 5 working days of receipt, stating who will be handling the complaint and enclosing a copy of the leaflet “Our Complaint Handling procedures”.  Also include an authority letter, using the appropriate template letter, to be completed and returned by the client, so that information can be obtained from third parties (such as product providers, solicitors etc) if required.

4.3 Third party complaints procedure

FCA say – “If you receive a complaint that is the responsibility of another party… you must have procedures in place to refer it to the appropriate party rather than simply reject it”. An example of such a complaint is a client complaining about the service received from a product provider.

In practice, this means that if you receive such a complaint, you should:

1        Assess whether the issues relate to your responsibilities or those of another firm.

2        If appropriate, refer the complaint on to that firm.

3        Inform the customer in your response, why you do not consider the complaint is relevant to you. You should also provide a contact point of the firm to whom the complaint is being referred.

4        If you are partially responsible for the complaint, you should refer the relevant part of the complaint on and continue to deal with your own issues.

4.4 Information gathering

Obtain the following information so the investigation can be carried out:

1        Client file

2        Written report from the person concerned (if the person is no longer with the firm, reasonable steps should be taken to obtain a report – for example, at least two letters to the last known address.  If no response is received, a note to confirm this should be made on file).

KPI information for the adviser concerned for the previous two years, such as:

1        Persistency

2        Other complaints

3        Business monitoring review records

4        Disciplinary records

If the information needs to be obtained from elsewhere within the firm, monitor this to ensure it is received in a timely manner.

4.5    Complaints Investigation

4.5.1 Assessing the complaint

Staff involved with the investigation of complaints must be suitably competent and where possible should not have been directly involved in the matter which is the subject of the complaint.  The complaints investigator must carry out a balanced and objective investigation, taking account of the client file, the adviser’s report and the information provided by the complainant.  Give particular consideration to the KPI information obtained about the adviser, such as previous complaints, persistency, business monitoring reviews and disciplinary.  If adverse trends are identified, document the issues so that appropriate remedial action can be assessed, for example a review of past business, training etc.

4.5.2 Making a Decision

The decision should be impartial, unbiased, fully justified and based on all the evidence/documentation held on the complaint file.  It is important that this is done using the documented facts and not decided on using assumptions or complainant/adviser verbal recollection.  This is done to ensure that complainant’s are treated fairly.

In instances where there is a dispute of facts and lack of documentary evidence to support a claim, then the decision can be based on a balance of probability.  This method of decision has to be supported in the Final Response Letter and should be used in exceptional circumstances only.

A decision is drafted, which details the investigators understanding of the customer’s complaint, the circumstances at the point-of-sale, our response to each point of the customer’s complaint, our overall decision to either uphold or reject their claims and any offer of redress made (including the calculation).  As this letter is to be issued to the complainant, it must be written in a way, which is clear, fair and not misleading (i.e. plain English, avoiding jargon and providing an appropriate level of respect).

4.6    Complaint Outstanding Letters

4.6.1 “4 week date”

If the investigation has not been concluded within 4 weeks from the date the complaint was received, issue a letter to the complainant, using the appropriate template, to explain why it is not possible to provide a final response and when further contact will be made.

4.6.2 “8 week” date

The investigation should be carried out in a timely manner and it is expected that complaints will normally be resolved before this date.  However, if the investigation has not been concluded within 8 weeks from the date the complaint was received, issue a letter to the complainant, using the appropriate template, to explain why it is not possible to provide a final response and when it is anticipated a final response will be issued.

Also confirm that the matter may be referred to the Financial Ombudsman Service if the complainant is not satisfied with the progress of the investigation, providing the full name, address and telephone number of the Ombudsman and enclosing a copy of the leaflet “Your Complaint and the Ombudsman”.

4.7    Final Response

When the investigation has been completed and a conclusion has been reached, prepare a response letter for issue to the complainant, using the appropriate template.  Responses to complaints must adequately address the issues raised by the complainant and, where upheld, offer redress as appropriate.  Ensure the following is included in the letter:

1        A summary of the complaint;

2        A summary of the outcome of the investigation;

3        Whether it is acknowledged the firm is in some way at fault;

4        Details of any offer of redress to settle the complaint;

5        How long the offer will remain open;

(If applicable) that it is considered the complaint is outside the jurisdiction of the Financial Ombudsman Service, but explain it is for the Financial Ombudsman Service to decide.

If redress is to be offered, clearly evidence how the redress has been calculated and add “without prejudice” to the top of the letter.

Also confirm the matter may be referred to the Financial Ombudsman Service if the complainant is not satisfied with the outcome of the investigation, providing the full name, address and telephone number of the Ombudsman and enclosing a copy of the leaflet “Your Complaint and the Ombudsman” (unless this was previously provided at the 8 week date).  Also confirm that the complainant has six months from the date of the response letter in which to refer the matter to the Ombudsman.

4.8    Closing the Complaint

When a complaint is ready to be closed, update the complaints register, detailing the date closed, the outcome and any redress paid, if applicable.  The complaints register will be a useful tool for compiling the 6 monthly complaints report to the FSA.

Ensure all documentation is on file and in logical order and retain, for a minimum of three years or, for pension transfer and opt outs and FSAVC cases, retain indefinitely.

4.9    Implementing remedial actions

If, during the course of the investigation, adverse trends were identified, ensure any remedial action is carried out and documented, in accordance with the internal systems and controls.

4.10  Dealing with the Financial Ombudsman Service

Where the final response has been issued and a completed complaint form is subsequently received from the Financial Ombudsman Service, update the complaints register accordingly.

Prepare a submission, typically to comprise:

1        A brief overview of the complaint;

2        An outline of the principal reasons behind the decision reached;

3        Copy of the final response letter and any relevant documents central to that decision;

4        Additional comments from the adviser.

Send the submission to the Financial Ombudsman Service as soon as possible, using the template submission letter, and make a diary note to enquire as to progress on a monthly basis.

Cooperate with any further enquiries the Ombudsman may have in a timely manner.

5. RECORD KEEPING

DISP 1.5.1 R – 1.5.2 G states:

A firm must make and retain records of complaints subject to DISP 1.4 – DISP 1.6 for a minimum period of three years from the date of its receipt of the complaint.

The records required by DISP 1.5.1R are for the purposes of monitoring by the FSA and also to ensure that the firm is able to cooperate, as necessary, with the Financial Ombudsman Service. They should include:

(1)     the name of the complainant;

(2)     the substance of the complaint; and

(3)     any correspondence between the firm and the complainant, including details of any redress offered by the firm.