Complaints- who wants them!


I have worked for many regulated firms.  I have never felt that any of the firms fully and satisfactorily made a cultural shift in dealing with complaints from the traditional defensive approach to a marketer’s holy grail of using complaints to implement continual constructive product improvement.  Yes, of course, the mantra was that complaints should be seen as a positive feedback mechanism, which if managed properly, could lead to a long term customer relationship and better products.  But, the reality was that complaints tended to be received in a defensive manner and the management/settling of them continued in the same vain.  This ultimately led to a war of attrition in which there were no winners.  Businesses lost customers and continued making the same mistakes; customers ‘voted with their feet’ and took their business to more customer focused product providers.  QED, no winners.  As a marketer, I know that improved complaint handling leads to better consumer outcomes – successful customer orientated businesses know this too!

Sadly, it has taken regulators rather than marketers to make change happen.  Unfortunately, this shows that ‘what gets measured gets done’ and sometimes ‘the stick is more powerful than the carrot’.  However, it does not matter what drives the change, all that is important is that change happens.  Regulated financial firms make a difference (in both positive and negative ways) to so many of our lives that they have to move from their old-fashioned non-customer focused ways.

Whether firms respond or not it is clear that significant changes will be made to the rules and that firms will need to make changes to how they work, therefore, all firms need to ‘keep on top’ of this issue

The Financial Conduct Authority [FCA], and the Financial Service Authority before it, have applied constant and consistent pressure to the firms regulated by them in respect of effective complaint handling.  The results of their thematic review [TR14/18 Complaint handling – November 2014] have continued the theme of a progressive increase in the emphasis of solving customer complaints in a customer orientated way.  Firms wanting to learn from the thematic review need to look no further than the common barriers to competent complaint handling.  Such barriers include the application of FCA rules in respect of dispute resolution [DISP], businesses operating models, businesses culture, management ability (or lack of ability) to conduct effective root cause analysis and the lack of relevant management information.  Eliminating these barriers would contribute to a significantly better customer experience.

Not surprisingly, as is the usual case, the thematic review has led to a FCA consultation paper [Improving complaints handling CP14/30 – December 2014].  The popular media have focused in the most immediate consumer benefit on the consultation, which will require “all post-contractual calls to financial firms to be charged to consumers at a maximum ‘basic rate’ (which will not permit firms to provide ‘premium’ rate, including 0845 numbers, but will permit mobile numbers)”.  Ironically, it is noted that those who want a paper copy of the FCA consultation have to dial a FCA 0845 number!  In any event, I can’t understand why the FCA wants to ban 0845 numbers, which are charged at the rate of a local call and are often free in price plans, but is prepared to allow companies to use mobile numbers!!  However, from an operational perspective the consultation is more far reaching than new telephone numbers.  The items being consulted on cover operational/workflow issues as well as data metrics.  The suggested changes are too voluminous to cover in a space limited article such as this, but it is important that all regulated firms consider the proposals and respond where necessary.  Firms wishing to respond to the consultation need to do so by 13 March 2015 and can respond online at   Whether firms respond or not it is clear that significant changes will be made to the rules and that firms will need to make changes to how they work, therefore, all firms need to ‘keep on top’ of this issue.


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Partner - Baxters Business Consultants - a business consultancy undertaking marketing, training, freelance journalism and expert witness services to the residential mortgage lending, building society and financial service industry (April 1993 to date) -

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