Firm handling of complaints during coronavirus

We know that coronavirus (Covid-19) and the associated public health measures have caused many firms serious practical challenges in their operations dealing with consumer complaints. 

Although firms’ operations continue to be affected, we consider that firms have now had enough time to embed new ways of working, and, accordingly, a failure to comply with our complaint handling requirements should only arise in exceptional circumstances connected to the impact of coronavirus.

This statement clarifies our position on complaint handling in the current circumstances. 

We reviewed this statement in October 2020 and have re-published it with some minor revisions. We intend to review this statement again by the end of April 2021 at the latest.

• Complaint handling capacity and priorities
• Vulnerable consumers
• Maintaining the quality of complaint handling
• Firms experiencing difficulties
• Claims management companies and referrals to the Financial Ombudsman Service
• The Ombudsman Service’s general approach
• Other considerations for CMCs
• PPI complaints

Complaint handling capacity and priorities

In the current circumstances relating to coronavirus, handling complaints remains an important function which should continue. Firms should take all reasonable steps to ensure as much complaint handling as possible continues including where staff are working from home, where this can be done fairly and effectively. 

We continue to expect the relevant senior managers within firms to be accountable for effectively overseeing how their firms handle complaints. Where firms are experiencing reduced complaint handling capacity as a result of coronavirus, we expect firms to prioritise:

1. paying promptly complainants who have been offered redress and accepted that offer (this includes compensation awarded by the Financial Ombudsman Service)
2. the prompt and fair resolution of complaints from:
   • consumers who are likely to be vulnerable to harm if their complaint is not resolved promptly and fairly, and
   • micro-enterprises and small businesses who are likely to face serious financial difficulties if their complaint is not resolved promptly and fairly
3. sending timely holding responses to those complainants in 2. where their complaints cannot be resolved promptly. 

Where firms choose to carry out complaint handling from a workplace, rather than through homeworking, they will need to ensure they follow the relevant guidance for working safely during coronavirus, which differs for England[1], Wales[2], Scotland[3], and Northern Ireland[4]. Firms should also adapt to any guidance or requirements that may affect the local area.

Firms should also be mindful that we expect them to cooperate with the Ombudsman Service on any complaints which it is considering, and respond to requests for information in a timely fashion, as required by DISP 1.4.4. For information about changes to complaint reporting and publication requirements during coronavirus, please refer to our statement on temporary measures for firms submitting regulatory returns[5]. 
 

Vulnerable consumers

Our definition of a vulnerable consumer in our Approach to Consumers[6] and our draft Guidance for firms on the fair treatment of vulnerable customers[7] is someone whose personal circumstances make them especially susceptible to harm if a firm has not acted with appropriate levels of care, such as resolving their complaint promptly and fairly.

We have identified 4 key drivers which may increase the risk of vulnerability. These are health, such as poor mental or physical health, low financial or emotional resilience, life events such as bereavement or divorce, and low capability, including poor digital (eg ability to communicate and transact online), language and cognitive skills, as well as low financial capability.

Firms should be aware that coronavirus and the associated public health measures are likely to exacerbate the personal circumstances that can cause vulnerability. They may also cause many consumers who would not normally think of themselves as vulnerable to suddenly face personal circumstances that can cause vulnerability. Coronavirus could exacerbate, or suddenly cause, vulnerability in many ways. These may include: loss of income from losing employment or being furloughed, the impact of isolation on mental and physical health, and people’s ability to work and care for others. And, particularly in the case of some key workers, the impact of extremely demanding working conditions and greater exposure to the virus itself. 

Finally, our vulnerable consumer definition was developed with individuals in mind. However, firms should be aware that micro-enterprises and small businesses can also face circumstances that can make them especially susceptible to harm if a firm’s failure to act with appropriate levels of care means their complaint is not resolved promptly and fairly.

Maintaining the quality of complaint handling

While firms may be dealing with fewer complaints each week and so taking longer than usual to answer some complaints, we do not expect any reduction in the quality of firms’ complaint handling. Firms should ensure they continue to meet the relevant obligations, including investigating complaints competently, diligently and impartially, cooperating with the Ombudsman Service and paying appropriate redress or making other appropriate remediation. 

We also do not expect the current circumstances to materially affect firms’ abilities to:   

• tell consumers about their complaint procedures and those of the Financial Ombudsman Service, noting that the Ombudsman Service’s standard explanatory leaflet[8] can be provided electronically
• enable consumers to submit complaints – although firms may need to restrict more resource-intensive complaints channels, such as telephone lines, to consumers who cannot use other channels, such as customers with whom firms do not interact online  
• acknowledge receipt of complaints, particularly where the firm has the technology to send automated responses by email or online to complaints made electronically
• co-operate fully with the Ombudsman Service when complaints are referred, including ensuring that requests for information and evidence are dealt with promptly, and any awards by the Ombudsman Service are complied with in a timely manner

Firms experiencing difficulties

When we first published this statement on 1 May 2020, we recognised that operational challenges could result in some firms finding it more difficult to meet certain requirements in DISP 1.6. In particular, the requirement to provide a final response to complaints within 8 weeks of receipt (15 business days rather than 8 weeks for payment services or e-money complaints), or a holding response explaining why they’ve been unable to provide a final response within the timeframe.

We consider that firms have now had enough time to embed new ways of working, and, accordingly, a failure to comply with DISP 1.6, or other complaint handling requirements, should only arise in exceptional circumstances connected to the impact of Covid-19. Any firm that is facing difficulties complying should inform their usual supervisory contact or contact [email protected], and tell us the steps it is taking to manage and address its non-compliance.

Claims management companies and referrals to the Financial Ombudsman Service

While the circumstances relating to coronavirus continue, we expect claims management companies (CMCs) to allow firms the time requested in their holding responses, to give a final response before referring complaints to the Ombudsman Service, if the CMC considers this amount of time reasonable. (As noted above, this period is 15 business days for payment services or e-money complaints, rising to 35 business days where the firm has sent a holding response within 15 business days of receiving the complaint.) 

When considering what is a reasonable amount of time for a firm to provide a final response, we will consider the current operational challenges firms face, and expect CMCs to do the same, unless they identify and can show a particular urgency in the individual complaint and circumstances of the complainant.

The Ombudsman Service will also have regard to the current, exceptional circumstances. It may return a complaint to the CMC, and ask the firm to get in touch with the CMC directly to discuss timings and the way to resolve the complaint. We think the Ombudsman Service’s likely approach will be in the best interests of CMCs’ customers. We expect CMCs to cooperate with the Ombudsman Service in this and play their part by acting professionally and reasonably.  

This will also help to ensure that the Ombudsman Service, which may see its own capacity affected by the current circumstances, can focus on resolving complaints referred to it by vulnerable consumers. 

We are asking individual consumers[9] to show similar patience where they do not receive a final response to their complaint within the timeframes set out in our rules. 

The Ombudsman Service’s general approach

The Ombudsman Service determines complaints by reference to what is, in its opinion, fair and reasonable in all the circumstances of the case. So, the challenges faced by firms during this period, and what counted as good industry practice at the time, will form part of that assessment. Many of the FCA’s rules, such as those on promptly investigating complaints, already give firms significant flexibility. Where we issue guidance that gives firms additional flexibility to help them deal with difficult operating conditions, such as the guidance we have published on unsecured credit, the Ombudsman Service will take this guidance into account.

We have exchanged letters with the Ombudsman Service providing additional clarity for firms on its approach to assessing complaints relating to the range of targeted temporary measures introduced by the FCA to help consumers during the pandemic (FCA's letter[10] and the Ombudsman Service's response[11]), as well as complaints about the Government’s Coronavirus Business Interruption Loan Scheme and Bounce Back Loan Scheme (FCA's letter[12] and the Ombudsman Service's response[13]).

Following the publication of updated and additional guidance to enhance the support for mortgage[14] and consumer credit[15] borrowers who face payment difficulties due to coronavirus, we have exchanged letters again with the Ombudsman Service to reconfirm its approach to assessing complaints (FCA’s letter[16] and the Ombudsman Service’s response[17]).

Other considerations for CMCs

CMCs should continue to keep clients updated on their complaints and relevant developments in accordance with CMCOB 6.1.9.

CMCs may need to take in to account clients’ circumstances when collecting fees.

Firms are likely to experience challenges currently in responding to Data Subject Access Requests within the usual timeframes. We encourage CMCs to maintain dialogue with firms to understand these challenges, and to consider any guidance from the Information Commissioner’s Office (ICO). Where CMCs cannot resolve issues with firms in this way, the ICO would prefer them to speak to it directly before making complaints to it about firms. 

PPI complaints

The considerations above apply to all complaints, including PPI complaints.  

We remind CMCs of our October 2019 Dear CEO letter on PPI complaints[18]. That letter is still our view and that of the Ombudsman Service. 

Most of the PPI complaints that were submitted by the 29 August 2019 deadline have now received final responses from firms. 

Firms should continue to update the remaining PPI complainants on when they can expect a final response.

We continue to monitor firms’ progress to ensure they complete their PPI complaint handling fairly.