The importance of complaints management

Complaints management is critical in consumer credit. A well-handled complaint can enhance a lender’s reputation, while poor handling can lead to regulatory penalties and reputational damage. The FOS and FCA require firms to have robust complaints-handling processes in place to ensure fair resolutions.

The financial services sector has seen an increase in complaints related to affordability, vulnerability, and contract disputes. Many consumers escalate complaints to the FOS, leading to concerns over fairness, as firms must cover the cost of referrals regardless of the outcome.

Firms must analyse complaint trends, address root causes, and improve processes to prevent recurring issues. Under the Consumer Duty, lenders must demonstrate they proactively reduce complaints through fair treatment and effective customer engagement.

CCTA supports members in navigating complaints handling and FOS referrals, providing best practice guidance and advocating for proportionate regulatory treatment.

Managing complaints effectively is critical for maintaining trust and compliance. For best practices, insights on regulatory expectations, and support in handling Financial Ombudsman referrals, explore our complaints management resources or join our member discussions.