What are the complaint timeframe rules in Financial Services?

Right now, in late November 2021, if you lodge a complaint with a Financial Services business, they have 8 weeks to resolve it before you are entitled to escalate to the Financial Ombudsman Service. The 8-week time frame dates back to the creation of ombudsman services in the UK, and it was originally intended to allow for correspondence and evidence to be sent by post. But even in modern times, the timeframe has, for some businesses, proved difficult to stick to during the increase in complaints activity we’ve seen across the industry over recent years, and it is a key factor in the looming threat of a post-pandemic surge. Recent years have seen complaints functions at organisations of all sizes challenged, and they’ve had to solve new problems in new ways, always with the 8-week clock ticking.

How are complaint timeframes changing?

So it’s understandable that there is a lot of concern about government proposals to cut the limit by half, to just 4 weeks. Put forward under a consultation on “’Reforming Competition and Consumer Policy’” which opened in July and closed in October, this would arguably be the single biggest shake-up to complaints rules in decades. What should firms do? How do you prepare and adapt for such a harsh constriction in time frames, especially if your complaints staff are already pushed to their limits just keeping on top of the number of complaints? Could news that financial services complaints have to now be solved in one month actually see a further increase in consumers complaining?

How should businesses meet the reduced complaints timeframe?

The most straightforward response would seem to be scaling up complaints teams, and for many businesses, I think that will be necessary. But doubling your complaints headcount to try to half response time presents many challenges. For smaller organisations, they may struggle to physically fit more staff in their offices. Businesses that have already adapted to remote working may be ready for that particular challenge, but I know complaints is one of the functions that we’ve seen face more hurdles than most when it comes to a smooth, efficient remote work approach.

And where will everyone find the staff for a potential 100% increase in headcount? With many permanent workers not moving during these times, highly skilled and experienced complaints professionals are already in high demand. If every single financial services business and banks of all sizes are seeking new complaints staff at once, the pool of available quality contract talent is going to very quickly be eaten into.

That question of skills and experience is going to be a key one – the type of work complaint handlers do has changed so much over the last ten years, and any business thinking about moving across staff from other departments or taking on people with no experience and training them up will need to carefully consider if they’re creating the kind of empathic, vulnerability-smart complaints teams who won’t generate any further complaints themselves.

If the 4-week reduction happens, it will undeniably be a huge challenge to adapt to, unlike anything the complaints sphere has faced before, but I think it’s one smart organisations will rise to. There’s an opportunity here to make customers feel valued and to rapidly tackle problems that in the past could have slowly soured a consumer’s feelings about a brand permanently. And Kind Consultancy can help. We have experience of installing full complaints teams, both temporarily and permanently, into organisations of differing sizes across Financial Services. We work with transformation experts who can oversee any necessary changes to policy and procedure, vulnerability champions who can ensure your staff are delivering on your duty of consumer care and highly experienced complaint handlers themselves, people who are already adept at satisfactorily closing complex complaints as quickly and efficiently as possible.

For a confidential conversation about how Kind can help your business, contact selena@kindconsultancy.con or call 01226432100.

The Rising Tide

Recent news reports have confirmed that a trend I have seen in the businesses that I am in discussions with, is being replicated across the wider Financial Services and Banking industry; in that, there is currently a huge drive to invest in collections and complaints resources.

Why now? It is all to do with the economic knock-on effects of Covid-19. The payment holiday options that have been offered in the wake of the pandemic have been a vital lifeline for many people, but we are also starting to see some issues that they can lead to. For example, there are situations where customers have taken a payment holiday at a time when they were furloughed and believed they would be returning to work, only to instead be made redundant just as their payment holiday period expires. Another example is where freelancers within industries, that have remained shut down since March last year, such as those who work in entertainment and events, who have exercised their payment holiday options as soon as they could, confident that they would be back up and running by now, only to face a potential second year of being unable to work.

Recent research by the complaint’s website Resolver suggested that as many as 4 in 10 people who had taken payment holidays, felt that they had not had all of their options properly explained to them, with over a third saying that they had not realised the lender would still charge interest on the outstanding balance and that that they did not know when that interest would be payable. A similar number said they were now concerned about their ability to pay back what they owe.

The impact of this on Financial Services means lenders are having to rapidly scale up their collections and complaints functions. They need staff who can sensitively put appropriate plans in place to recover the money owed to them and where the customer is unhappy with the service they have received, they need to make sure those complaints are properly addressed – to prevent any further scrutiny from the regulator and/or increase of Financial Ombudsman fees.

How Can Small Businesses Keep Up?

So, large organisations are currently engaging in a major recruitment drive for staff with these specific skill sets. But smaller businesses preparing for the coming spike in complaints and collections needs, are facing some hurdles. What can you do if you have a small team that is used to handling a much lower number of complaints and collections activity, but do not have the capacity to add more?

There is the physical space needed for extra staff, and some highly successful Financial Services businesses with sizable customer bases are surprisingly small operations that simply do not have the spare offices and desks to fill with the number of people needed to tackle this challenge. Even if they are working remotely, albeit, for the short term, the cost of supplying the necessary secure, and compliant phone and computer systems is just not economical for many.

There are other less immediately visible issues too, smaller businesses are less likely to have the time to spare and resources needed to train their staff on crucial issues like handling vulnerable customers, asking unprepared, reallocated employees to respond to complex payment holiday complaints could generate a significant number of complaints, causing unnecessary harm to the business.

The Outsourced Option and Agile Solutions

That is where Kind Consultancy can help. We are now able to offer tailored outsourced solutions. Alongside our partners, we can quickly create a virtual contact centre for your business, giving you the customer contact capacity that you need to handle the ongoing rise in inquiries. As a dedicated outsourcing provider focussed on Financial Services, they understand the importance of carefully controlled customer contact within a highly regulated industry and they work to provide tailored solutions to seamlessly integrate customer contact, complaints, collections, and quality assurance teams into client’s businesses. The outsourced team becomes a seamless extension of your business, integrating with your strategies and policies and always staffed only by highly qualified professionals who have the knowledge and training that are so vital in the current landscape.

Together, we can help keep you ahead of the growing demand you are facing from customers, all done entirely remotely and at a fraction of the cost of installing a permanent team of new staff in your office.

Alongside that outsourcing expertise, we draw on our own network of these top-tier, qualified and talented individuals whom we know have a track record of delivering high-quality work. If you are not looking to outsource but do need interim support during the increasingly busy period ahead, Kind Agile Solutions allows us to deploy pre-screened experts to join our client’s in much shorter timeframes than through traditional methods. We only add the best of the best contractors we meet to the KAS bench, so we are confident that an Agile Solutions team will have the experience necessary to tackle the specific problems faced by your business.

For a confidential discussion about how Kind Consultancy can help your organisation, contact selena@kindconsultancy.com or call 01216432100.