Find out about how firms should handle complaints during coronavirus.
We know that coronavirus (Covid-19) and the associated public health measures are causing many firms serious practical challenges, including in their operations dealing with consumer complaints.
This statement clarifies our position on complaint handling in the current circumstances.
We will review and update this statement in 3 months’ time.
- 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
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 through staff working from home, where this can be done fairly and effectively.
We understand that firms’ capacity to handle complaints could be reduced as a result. We expect firms to prioritise:
- paying promptly complainants who have been offered redress and accepted that offer
- 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
- sending timely holding responses to those complainants in 2. where their complaints cannot be resolved promptly.
If a firm cannot deliver these 3 priorities adequately and effectively through home working, then we consider it could be appropriate for the firm to maintain the minimal physical onsite presence needed to do so. This is as long as the site is configured for social distancing in line with Government guidelines.
Our definition of a vulnerable consumer in our Approach to Consumers is someone whose circumstances make them especially vulnerable to harm if a firm has not acted with appropriate levels of care, such as resolving their complaint promptly and fairly.
Circumstances that can cause a consumer to become vulnerable include poor 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.
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, 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 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
We recognise that operational challenges mean that some firms may find 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 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.
Any firm that has material difficulties complying with DISP 1.6, or other complaint handling requirements, 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.
While the circumstances relating to coronavirus continue, we expect claims management companies (CMCs) to allow firms a reasonable amount of extra time, beyond 8 weeks, to give a final response before referring complaints to the Ombudsman Service. (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 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 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 and the Ombudsman Service's response), as well as complaints about the Government’s Coronavirus Business Interruption Loan Scheme and Bounce Back Loan Scheme (FCA's letter and the Ombudsman Service's response).
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.
The considerations above apply to all complaints, including PPI complaints.
We remind CMCs of our October 2019 Dear CEO letter on PPI complaints. That letter is still our view and that of the Ombudsman Service.
However, from our discussions with firms, we understand that most PPI complaints will still receive a final response by the summer.
Firms should continue to update PPI complainants on when they can expect a final response.
We will monitor firms’ progress to ensure they complete their PPI complaint handling fairly.