If you want to know whether you are treating customers fairly or not, one of the things you can do is ask them – and another is to pay attention when they complain. It’s well understood that a complaint from a customer is an opportunity on at least two levels: firstly, if it’s dealt with quickly and efficiently the experience can strengthen the customer’s relationship with the FSP and enhance the provider’s reputation; secondly, a complaint alerts the provider to potential problem areas in its own business that can be addressed before further harm is done. Customer service surveys reliably show that most dissatisfied customers don’t necessarily complain at all – they simply withdraw their business. However, we also know that it doesn’t end there. People share their bad experiences far more widely than they share satisfaction – and this has been magnified by the ease with which social media can spread a story far and wide and swiftly.

What’s this got to do with the General Code of Conduct? Well, another one of the areas of the Code that rolls out of the legislative workshops with a serious upgrade for 2021 is Part XI: Complaints Management.

To some extent, the emergence of the Treating Customers Fairly principles was the result of poor customer experiences over many years, reflected in unsatisfactory outcomes and complaints of bad conduct. So how complaints must be dealt with has always mattered to Regulators. In re-writing the Code to incorporate the TCF principles the Authority has become more prescriptive in some areas, in keeping with the pre-emptive and intrusive approach of conduct regulation. There is an expanded definition of a complaint, for the purposes of the Code. Previously, the definition in the FAIS Act was used, which requires that the complainant suffers or be likely to suffer prejudice or damage, or to be treated unfairly. This definition still stands for the purposes of defining complaints to the FAIS Ombud – but the new Code definition is deliberately wider. A complaint is now an expression of dissatisfaction, and it can allege that a provider has failed to follow any of the laws, rules, codes or agreements that apply to it – not just the FAIS Act. A person may complain that the provider’s actions have caused not just harm or prejudice, but also distress or substantial inconvenience. I have no doubt that some fascinating customer relationship stories will emerge in future: one of the features of conduct- and outcomes-based legislation, as opposed to check-list regulation, is that judgements are subjective. If a customer asserts that he or she has suffered distress or inconvenience, the provider can hardly deny that experience.

In addition, the definition of complainant for the purposes of the Code has changed. The FAIS Act definition refers to a complainant engaging with the Ombud and will still apply in that context. The Code definition now has six types of person who could submit an expression of dissatisfaction. Along with the usual roles, a person who is a member of a fund or a group scheme to which a provider has rendered a financial service can now complain to the provider directly. A person who is dissatisfied, not with the product or financial service itself, but with any approach, marketing or advertising about it will count as a complainant. The definition says that the person must have a direct interest in the agreement, product or service – but also allows a person acting on behalf of any of the specified persons to be a complainant. So, given the speed at which “outrage” can spread in these times, will we see providers having to process complaints about photographs and brochures?

When it comes to processing complaints, Providers will have to upgrade their complaints management systems and procedures ( which have to be in place now, anyway) to accommodate a wider range of complaints and, possibly, a broader group of complainants. The Authority acknowledges that FSPs of different size and complexity will have different exposure to complaints. The Code requires every FSP to have a documented complaints management framework that is proportionate to its size and appropriate to its business and clients. As before, these systems must be freely visible to clients. In the time that’s remaining in 2020, FSPs should review their current complaints policies and systems and adjust them where necessary to bring them into line with the requirements in the new, muscled-up section 17 of the Code as many of them come into effect on Boxing Day/ Day of Goodwill 2020. Isn’t that an appropriate day for enhanced complaints-handling processes to kick in?

The balance of the complaints procedures will come into effect in June 2021, and these are the requirements for documenting processes, recording and categorising complaints, and analysing them. Any good customer relationship management system will already be analysing complaints in order to eliminate their causes as far as possible, as I said at the outset. The Code requirements now add a new compliance element for FSPs great and small, so there will be work to be done in the new year to align with these. It is likely that this will entail training and skills work with staff, as well as design and documentation of processes.