Effective Complaint Handling
5 Effective Complaint
Handling
Objectives
By the end of this chapter, you should be able to:
• Explain the key skills and models to be used when resolving
complaints:
– Communication techniques
– Rapport and relationship building
– Transactional analysis
– Assertive behaviours
– Use of positive language
– Complaints resolution model
– Service recovery techniques
• Respond successfully to typical complaints as presented in case
studies (including levels and types of redress).
• Investigate, make decisions and offer appropriate compensation
across a range of complaints.
• Identify and explain a Complaints Handling Procedure.
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Introduction
So far in this course, we have looked at what constitutes a complaint within the financial
services sector and what the regulator is looking for firms to do with regard to their
responses to complaints. We have also looked at who the major players are in the sector
as well as considering the Treating Customers Fairly initiative. In the last chapter we
considered in more detail the legislative and regulatory frameworks that are important
in the handling of complaints.
The time is now right to consider how the individual member of staff should respond
when facing a complaint. Remember that these behaviours are as important when
dealing with non-regulated complaints, which are quickly (indeed often, immediately)
resolved and the regulated complaints which are reported to the FSA. Firms should
have in place a complaints handling procedure and we will examine a typical policy.
Communication techniques
When dealing with an unhappy customer, much of the outcome of the scenario will
be down to the way in which the firm’s representative – you – communicates with the
customer. Therefore the next section is vitally important for the effective resolution of
complaints.
The first thing to bear in mind is that, in most cases, the complaint is about either
the level of service provided by the firm, or about a perceived difficulty with one of
the products. It is important, therefore, not to take the complaint personally. This can
be difficult, especially if the customer is very vocal and aggressive in the way they are
complaining.
However, if you need to apologise, always keep in mind that you are apologising
on behalf of the firm … not necessarily admitting personal culpability. Often, when
a customer is complaining, all that is needed to calm the situation down is a simple
apology and remedy. Most of us will only get more angry if the person we are
complaining to tells us that it was nothing to do with them and a colleague was to
blame!
We’ll start by looking at how we communicate in an effective manner with another
person, before looking at a communication model which can be used when dealing
with a complaining customer. The section will conclude with an examination of how
we can recover the situation where a customer is a victim of service failure.
Quick question
Write down a short definition of communication.
Write your answer here before reading on.
Effective Complaint Handling
What is communication?
Here are two definitions of communication:
“… the process whereby messages are transmitted from one person to another”
Williamson (1981)
“The interchange of thoughts, opinions or information by speech, writing or
signs.”
Anderson (1992)
From both of these definitions, we can see that, when we communicate, there are
at least two parties and communication is not just about the spoken word. When we
communicate face to face with another person, our communication comprises the
following three elements:
• How we look: posture, dress, non-verbal communication, eye contact
• How we sound: the pitch, tone, inflection and volume of delivery
• What we say: the words used.
The impact of each of these elements is:
• How we look: 55%
• How we sound: 38%
• What we say: 7%
You can see therefore that, while the words we use are important, it is the other
factors that affect how the complaining customer perceives them. However, when
thinking about dealing with a customer complaint, most of us prepare by focusing on
the words we will use, rather than on the way in which we will say them and how we
will deliver them.
Obviously if you are dealing with a customer complaint over the phone, the
customer cannot see you, so the only factors to consider are how you sound and what
you say. The impact percentages then are:
• How you sound: 83%
• What you say: 17%
The words used do have greater impact, but they are still far outweighed by the
way the words are communicated.
Questioning techniques
Whenever we deal with a customer complaint, it is vitally important that, in order
to resolve the matter, we must be quite clear about what the customer is actually
complaining about. The customer may make you aware of the complaint, but you may
sense that there is some other underlying matter which is what is really upsetting them.
It can be easy at this point to jump to the wrong conclusion and assume you know
why the customer is upset. It is vitally important therefore that you develop assertive
questioning techniques to get to the root cause of the customer’s dissatisfaction.
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There are two main classifications of questions: open questions and closed questions.
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Open questions
An open question is one that cannot be answered with a simple “yes” or “no”.
This is the type of question that you need to use when exploring the causes of the
customer’s dissatisfaction.
Open questions start with the words: who, what, where, when, why or how.
Most people do not like using open questions as they can appear inquisitive or even
nosy. Some people find them particularly difficult to use if the customer is angry
and upset. One reason for this is that if we ask a question starting with who, what,
where, when, why or how, it can appear very stark.
Quick question
How could you overcome this difficulty, yet still ask an open question?
Write your answer here before reading on.
There are two ways in which this can be done. Before you start asking the questions,
you could explain to the customer that, in order to help them, you will need to ask
them a series of questions. The other approach is to soften the questions with a prepositioning statement. For example, if the customer is complaining that the ATM
retained their card over the holiday weekend, were you simply to ask “What was
the message on the screen?” then this appears quite blunt.
One way of softening this question would be along the lines of “You say that the
ATM retained your card last Sunday. When this happened, what message appeared
on the screen?” This presents a more conciliatory approach – assuming that the tone
of voice you use matches this intent.
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Closed questions
Closed questions are those which may be fully answered with either a “yes” or a
“no”. However, these questions still have their part to play in complaint handling as
they are useful if you want to gain confirmation about the matter from the customer.
The key to the effectiveness of closed questions is knowing when to use them.
Often when using closed questions, the response is not actually a straight “yes”
or “no” – the other person will go on to expand in some way. However, by using
a closed rather than an open question, we are directing the conversation down a
particular route, rather than leaving matters in the customer’s hands, as is the way
with an open question.
Further types of question which can be used are probing, reflective and summary/
clarifying questions.
Effective Complaint Handling
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Probing questions
Probing questions will allow you to focus on the particular areas that the customer
is complaining about so that you will be able to gather further information on the
topic. Such questions clarify understanding of information that has already been
offered. For example: “When my colleague in the contact centre told you that the
loan application was declined, what reasons did they give you?”
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Reflective questions
The most useful form of reflection is phrased as a statement rather than as an
identifiable question. It reflects back to the speaker what he/she has said. For
example: “You are saying that the security questions you need to answer on our
website are too complicated and that this is confusing you?”
Reflective questions are extremely useful for explaining attitudes and opinions
in detail or when the person is showing emotions, as it enables you to capture
the emotion and expand on how they are feeling about the situation they are
complaining about.
To be effective in the use of reflection, you need to listen carefully to what is being
said, interpret it accurately and respond accordingly. When asked with a questioning
tone of voice this type of question will normally be sufficient to enable the customer
to expand their point.
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Summary/clarifying questions
Summary or clarifying questions, like reflective statements, are concerned
with interpreting a response, but rather than reflecting emotional contact, they
concentrate on factual content. They demand a reiteration and repetition of the
main points already discussed and agreed, and are used to paraphrase and check
understanding of what has been heard and agreed. For example: “So what we have
agreed is that I will investigate why your replacement card was not ordered and
get back to you by the end of the day tomorrow. I will also order the replacement
card immediately.”
Summary/clarifying questions can be used to review briefly, to check your
understanding of the facts, or to clarify the customer’s thoughts. They can also
prevent a drift from the purpose of the conversation and allow you to regain control
smoothly. This is useful where it is clear that the customer has expressed their
complaint and you know how you are going to deal with it.
As making a complaint can be an emotional and upsetting experience for the
customer, they may keep talking about the complaint but without adding any
further useful information. In effect they are talking in circles and your time could
be more effectively used to carry out your investigation and put a remedy in place.
Both reflective questions and summary/clarifying questions are also useful in that
they demonstrate to the other person that they are being listened to. After all, it is
impossible to ask either of these types of question unless we have been listening to
the other person.
Quick question
After asking appropriate questions, what is the next step?
Write your answer here before reading on.
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Active listening
After asking a question, it is important that you remain quiet and listen carefully to
what the customer says, which can be more difficult to do than it sounds. For example,
you may have received a lot of complaints in the recent past about a particular topic
and it is tempting to assume that the specific complaint that the customer is making is
exactly the same as all the others you have dealt with. However, each complaint must
be treated separately and you should focus on the customer in front of you – no matter
how easy it can be to switch off and think that you have “… heard all this before”. It
may also be useful to take notes at this point to refer to later if you need to carry out
some investigation into the complaint. Taking notes is also a useful way of imprinting
what the other person is saying in your mind.
Not only must you listen carefully to what the customer is saying, but you must also
show the customer that you are listening. This technique is known as active listening.
It is quite an intuitive process and includes the following:
• Observing as well as listening – remember that non-verbal communication
represents more than half the total communication of most individuals and
carries many messages about the person’s feelings. It pays to look as well as
listen for clues about the other’s feelings and needs. For example, when talking,
if they become more animated and their eyes “light up”, you can be confident
that they care about the subject. This is a useful technique to build rapport with
the customer and take the first steps towards repairing the firm’s relationship
with them.
• Asking the right questions and following up the responses (probing/reflective
questions are particularly useful here)
• Summarising and checking for understanding
• Taking notes
• Sitting attentively and remaining alert
• Maintaining regular eye contact – if a person breaks eye contact there is usually
a reason, whether loss of interest or some personal uneasiness about what they
are saying or what is being said by you or others.
Listening skills can be improved by integrating the following techniques into your
communications:
• Empathise with the position expressed by the other person
• Concentrate
• Retain emotional control
• Remove distractions
• Disassociate facts from the personal opinion of the speaker
• Focus on the attitudes and emotions of the speaker
• Stay open-minded
• Take practical steps to avoid barriers to effective listening in the environment
• Ask questions to clarify and reinforce what is being said
• Make it clear that you are genuinely interested
• Maintain appropriate eye contact
Effective Complaint Handling
The benefits of active listening are that:
• it starts the process of rebuilding the relationship with the customer
• it demonstrates courtesy and shows a willingness on your part to look at things
from the customer’s perspective and to resolve the matter
• it shows that you want to cooperate with the customer
• it makes it easier for you to understand what the complaint is all about
• as it encourages the customer to talk, you will have more information and so
will be able to make a better decision at the end of the process.
The ability to listen actively can be affected by six key factors. You must be aware
of these factors and take steps to overcome them. While this is important for all
communication, it is particularly important when dealing with a customer complaint.
If the customer is complaining and they then feel that you are not listening to them, this will only serve to make a bad situation even worse.
• Psychological barriers
– differences in status
– own mood
• Environmental barriers
– noise
–interruptions
– poor lighting
• Linguistic barriers
– monotonous voice
– complex vocabulary, jargon
• Physiological barriers
– aches and pains
–tiredness
• Perceptual barriers
– appearance of speaker
– cultural differences
• Content barriers
– content of little or no interest
– content boring or repetitive
• Personal barriers
– preoccupied with own worries
– waiting to interrupt
Silence and pauses are an essential element of verbal communication – without it
people may feel pressurised, confused, irritated or bored; they do not have time to
consider carefully what is being said and may form their own opinions and conclusions.
Equally, there will be times when you need silence to consider what has been said to
you. When making a complaint, the customer can be stressed and feel angry. As a
result, they may talk very quickly and in quite emotional terms, presenting you with
lots of information – and not all of it relevant. You therefore need some time to take
stock, reflect on what has been said, and make sense of it all.
However, using silence is a skill. Most people who are new to dealing with
complaints can lack the confidence and experience to let silence continue, or they let
it go on for too long and risk increasing the discomfort and anger of the customer.
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The following skills can also be used to help listening:
• Block out distractions: if you are dealing with a complaining customer, make sure
that you will not be interrupted. Taking the customer into an interview room is
a good plan of action. This also means that other customers do not see a public
show of complaint.
• Tune in: clear your own mind. Face the customer. Show that you are interested
in both the complaint and the customer.
• Encourage the customer to talk: this is especially important at the start of the
process when you need to let the customer “get things off their chest”. Show that
you have been listening by summarising what the customer has said.
• Pick out the relevant information as you proceed: making notes is best if you
need to investigate the matter once the customer has left.
• Use open questions.
• Watch the non-verbal communication: observe whether the customer feels
comfortable with the conversation and its setting. Be aware of your own nonverbal communication.
Transactional analysis
Transactional analysis is a way of analysing the way we interact with each other, and in
particular the way in which we communicate. It was developed by Eric Berne, a Swiss
psychotherapist, as an approach to psychoanalysis and therapy in the early 1950s. The
theory started to be used in commercial organisations as long ago as the 1960s, in an
effort to improve the ways in which people communicated and related to one another.
It is also a particularly useful technique to use when dealing with a person who is
making a complaint. Although it was originally used in psychotherapy, transactional
analysis is now seen by many people and organisations as a powerful and simple way
to understand, build and repair relationships.
Berne argued that each person has three basic ego states and when communicating,
we are always in one of these states: parent or adult or child. The parent and child ego
states further subdivide into other areas:
Parent
Controlling – makes rules, sets limits, disciplines, judges
Critical – bossy, overbearing, criticises
Nurturing – advises and guides, protects and nurtures
Adult Concerned with data and facts, considers options and
estimates probabilities, makes unemotional decisions,
plans and makes things happen
Child Free/natural – fun-loving and energetic, creative and
spontaneous
Adapted – compliant and polite, rebellious and
manipulative
Effective Complaint Handling
The parent ego state can be either controlling or nurturing. The controlling parent
can be either critical (bossy or overbearing) or structured (setting rules and boundaries
to keep people safe). This is our ingrained voice of authority, absorbed conditioning,
learning and attitudes developed up until about the age of 6 or 7 in the form of a figure
in authority, for example, our real parents, teachers, older people, etc. If a customer is
making a complaint, then they quite often communicate as a controlling parent – they
are telling you, often in quite a forceful manner – that you (or your organisation) has
let them down. Typical phrases that can be used here are:
• You have let me down again
• This is another in a long line of errors on my account
• It’s not good enough that I had to wait 10 minutes to speak to an adviser
The child ego state is either free/natural or adapted. The free/natural state is about
our emotions, and the adapted state is where we comply with what we are being asked
to do. A free/natural response to a complaining customer who is communicating as
a controlling parent is to say that the service failure is not your fault as you were on
holiday at the time. An adapted response is to agree with the customer.
The adult ego state is detached and cool, calm and reasoning and occurs when listening actively to what the customer is saying and so being able to make rational
decisions, based on the data collected and previous experience. Remember that the
adult ego state concentrates on facts and data rather than emotion.
Communication can only occur between:
• Parent – Child
• Child – Parent
• Adult – Adult
Berne argued that Parent – Parent communication is not possible as both parties
would be seeking to control the situation. However, if a person adopts the parent ego
state, they will almost force the other person into the child ego state.
Quick question
Which ego state do you think is the most appropriate when dealing with customer complaints
and why?
Write your answer here before reading on.
In order to gain resolution of the problem, it is important that you remain in the
adult ego state where you can separate the facts of the situation from the emotions that
are triggered by it. Later in this chapter we’ll look at the complaints resolution model
and see that it is important to empathise with a complaining customer, and that once
that is done we must quickly move to establish the facts of the particular case and
move from there to resolution.
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When first meeting the customer who wishes to make the complaint, they will be
in the controlling parent ego state – telling us how badly they have been let down by
your firm. You will certainly not want to adopt the child ego state, but you need to
move the customer into the adult ego state to allow effective communication to occur.
Quick question
What can you do in this situation to get the customer into the adult ego state?
Write your answer here before reading on.
Once you have empathised with the customer, you need to ask questions to establish
the facts of the matter. To begin with, the customer may have used some emotive and
wide ranging comment, such as “The level of service in this bank is awful … I’ve lost
count of the number of times I have had to speak to you about the availability of your
ATM”. You should then encourage the customer to be more specific and to give you
relevant information. An open question such as “Can you tell me when you have not
been able to access the ATM?” By taking this approach, you are removing the emotion
from the situation and allowing the customer to focus on the specifics of the complaint.
When they do this, they are dealing with facts and data, and so you have moved them
from being a controlling parent to an adult. As you are now both in the adult ego state
you are in a much better position to resolve the complaint. Obviously there are other
questions you could ask the customer to achieve this outcome.
Quick question
What do you understand by assertiveness?
Write your answer here before reading on.
Assertive behaviours
Tied into using the adult ego state in order to resolve complaints is the use of assertive
behaviour. Acting in this ego state demands that we demonstrate assertiveness,
especially if faced with a customer who is acting in an aggressive, manipulative or
passive manner.
Assertiveness is about behaving appropriately, honestly and authentically with the
people around us. It is about feeling confident enough in yourself to communicate in a
non-threatening way. It is also about respecting the customer so that you act towards
them honestly and sincerely. Assertiveness is not about bullying others or being
aggressive, although there is a common misconception that aggressive behaviour is
actually assertive behaviour.
Effective Complaint Handling
If you act in an assertive manner with other people, then it is more likely that they
will mirror this behaviour and act assertively with you. This will then put both parties
in the adult ego state and the chances of reaching a mutually acceptable outcome is
enhanced. Being an assertive person gives you a better chance of building a productive
professional relationship with the customer.
Assertiveness is a good way to build your self-confidence and equally, if you
do not act assertively, your self-image is diminished. Assertiveness is in the eye of
the beholder – most people remember clearly the times when they have not acted
assertively and tend to overlook the times when they have been assertive. However,
it is the customer’s perception of you which forms the basis of their reality, therefore
if the customer perceives you as an assertive person, they will relate to you as such –
whether you felt assertive at the time or not!
Behaviour types
There are four basic behaviour types associated with the study of assertiveness:
• Passive
• Manipulative
• Aggressive
• Assertive
It is important that you have an understanding of each to allow you to recognise
these behaviours not only in yourself, but also in the customers that you deal with.
While it is easy to think that most complaining customers will be angry and that this
will trigger aggressive behaviours, you will no doubt deal with complaining customers
who demonstrate all types of behaviour. You should also keep in mind that all of us
demonstrate all of these behaviours at one time or another, although most people have
a preference towards one or two of the styles.
Quick question
Reflect on each behaviour type and list the characteristics you would associate with each type.
Passive
Manipulative
Aggressive
Assertive
Write your answer here before reading on.
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Passive attitude and behaviour
“I’m not ok, you’re ok”
Passive people tend to be lacking in self confidence and when comparing themselves to
others, they always appear to come out second best. They seek out (often subconsciously)
people who are willing to put them down and concur with this judgement, due to their
low self esteem. This is a reinforcing downward spiral that takes great courage to break
out of. Passive people are aware of their lack of self confidence, but are not willing to
take responsibility, being more comfortable complying with the wishes of others. This
compliance can result in other people making more and more demands of the passive
person who will find it difficult to say “no”. The passive person tends to adopt the
adapted child ego state. To break out of the negative spiral, the passive person needs
to start believing that they can influence others through their ideas and behaviours.
Passive characteristics are:
• Lack of self confidence/low self esteem
• Little or no self respect
• Put themselves down constantly
• Think negatively about self
• Inferiority complex
• Prefer others to take control
• Demotivated
Manipulative attitude and behaviour
“I’m not ok, you’re not ok”
Manipulative people have a low image of themselves and of others, and often display
self-destructive traits, as well as seeking to be destructive towards others. Some of
us may have experienced this position , but hopefully only for a short time. When
voicing a complaint, the manipulative person is likely to blame members of staff or the
organisation itself, for example, saying that the products and services offered by this
firm are inferior to those offered by competitors. They are likely to base this perception
on a generally negative feeling about the organisation and not on the actual features
and benefits of the products offered. Manipulative people find it difficult to trust others.
As they are not straightforward in their behaviours with others, they expect others to
be devious with them.
Manipulative characteristics are:
• Lack of self confidence/low self esteem
• Little or no self respect or respect for others
• Mistrustful of others
• Think negatively about self and others
• Will twist what others say and do
• Undermine others’ self esteem
• Demotivated
Effective Complaint Handling
Aggressive attitude and behaviour
“I’m ok, you’re not ok”
The simplest way to understand aggressive behaviour is to picture it as the mirror of
passive behaviour. For the aggressive person, if things are not going their way, they
can often collapse into passive behaviour and become upset and tearful. On the other
hand, if a passive person is challenged, they may respond by becoming aggressive with
items they had bottled up suddenly exploding to the surface. While aggressive people
have a lack of self confidence, they hide this by acting aggressively. The aggressive
person will often believe that others are out to ”get them” and so they respond by
acting aggressively.
Aggressive characteristics are:
• Lack of self confidence/low self esteem
• Little respect for other people
• Like to put others down
• Feel superior to others
• Have a strong need to be in control
• Not interested in others’ thoughts and feelings
• Feelings of anger towards others – quick to point the finger
• Not prepared to ask questions or listen
• Will not accept feedback
Assertive attitude and behaviour
“I’m ok, you’re ok”
We all have the opportunity to choose to be assertive. This does not mean that we
will act assertively all of the time but should be aware of when we do and do not,
taking a conscious step to move from whichever one of the other three behaviours
back into assertive mode. Assertive people have confidence in themselves and are
positive thinkers. The more assertively you behave, the more others will change their
behaviour towards you.
Assertiveness techniques
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Know what you want to say
Be clear in your own mind exactly what you want to say. This avoids hesitation
when talking to the customer and so gives the impression of confidence.
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Appear comfortable in the situation
If you don’t, you will undermine your message. It doesn’t matter how you feel – the
other person will deal with what they see. Remember that if they expect you to be
assertive, then they look for signals that support this preconception. However, you
do not want to come across as “laid back” and unconcerned. You should be treating
the situation with the same level of importance as the customer. A useful technique
when dealing with an angry person is to match their energy, but not their anger.
You can do this by being attentive, having an upright posture and using positive,
non-verbal communication.
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Don’t laugh nervously
When dealing with a customer complaint, you may feel nervous – perhaps you are
dealing with a customer with a reputation for being awkward and difficult, or you
may be unsure of your ability to deal successfully with this type of situation. When
faced with this challenge, many people have a tendency to give a short, nervous
laugh. If you do this, you undermine your message.
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Maintain eye contact
Customers will expect you to do this. It communicates confidence – and you should
be confident because you are in your normal working environment and talking
about subjects that you should be very familiar with. If you don’t maintain good
eye contact you will seem unsure of yourself and the situation. You may also appear
distrustful. However, take care to make only genuine eye contact – don’t stare at
the customer – this is a sign of aggression.
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Say what you have to say
Decide what you have to say, and then say it – don’t “em” and “um”! This is
particularly relevant where you have carried out an investigation into the complaint
and are coming back to the customer with a message which you know, based on past
experience, they do not want to hear – perhaps you are having to tell them that you
will not be refunding charges on their account. In this situation, you need to know
what you have to say and you must come to the point quickly and directly. When
preparing for the conversation, remember the points made earlier about the impact
of your communication and plan not just what you are going to say, but also how
you will come across and how you want to sound when explaining matters to the
customer. It is also useful to anticipate how the customer is likely to react and plan
accordingly.
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Be specific
Say exactly what you can or cannot do. Start the statement with “I”. Don’t hide
behind the actions of others or the organisation. Remember that the complaint
should not be taken personally – and it will appear more professional if you take
ownership of the situation.
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Say it as soon as possible
Don’t wait for too long to get back to the customer – that can make you more nervous.
This is very important when you know that you will be the bearer of unwelcome
news to the customer.
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Communicate authentically
Be direct and honest, but with empathy for the customer’s circumstances and
feelings. Don’t try to make the customer feel guilty about raising the complaint –
that is manipulative behaviour. By being sarcastic, you are putting the customer
down and acting in a very unprofessional manner.
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Fogging This is used where you are receiving negative feedback from the customer, either
about you or the organisation. While there may be a basis of truth in the feedback,
the negative aspect has been exaggerated. To use fogging, you acknowledge that
there is some justification in the comments, but by only talking about facts, the minor
nature of the feedback is put into perspective. This is an example of using the adult
ego state as a means of having a conversation with the customer about the facts of
the situation and putting them into context.
Effective Complaint Handling
When you have done this, you can either resolve the issue for the customer, or if
the complaint is of a minor nature, they will be happy to leave matters as they are.
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Negative assertion
This technique is similar to fogging in that it deals with negative feedback from the
customer. In this situation, you put the service failure into perspective. An error has
occurred and the customer has not received the level of service they should expect.
While you may want to let the customer talk to “get things off their chest”, you
need to move on to remedy the problem to the customer’s satisfaction.
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Negative enquiry
With this technique, you must find out from the customer what you need to do to
deliver the service that they are looking for. You can find out specific information
about your organisation’s performance and, if you deliver against that, the customer
must agree that there is no longer an issue. On the other hand, if they cannot provide
specific information, they have been dealing with generalities and will have to back off.
Quick question
What do you think is meant by positive language?
Write your answer here before reading on.
Positive language
Earlier, when we looked at the impact of the three elements of communication, we saw
that the impact of the words that we use is only 7%. However, that is not to say that
you should not be careful about what you say to the customer! It is important that you
convey a professional image of yourself and the organisation and one of the ways you
can do this is through the use of positive language.
Language is a very important tool and the words you choose to use can have
a positive effect on how your communication is received. Even when conveying
unpleasant or unwelcome news to the customer, the language that you use can affect
the impact of your message. Most of us will have experience of working with some
people who have a negative outlook on life and this can be very wearing. When dealing
with a customer complaint, it is easy to fall into the trap of using negative language,
such as “I’m really sorry to have to tell you …”
Negative phrasing and language has the following characteristics:
• It tells the customer what cannot be done
• It has the hint of blame attached to it
• It often includes words such as can’t, won’t, unable to, etc
• It does not stress the positive actions that can be taken to remedy the situation
for the customer
• It sounds impersonal and focused around the organisation rather than the person
who is dealing with the customer
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Complaint Handling
Whereas positive language has the following qualities:
• It tells the customer what can and what will be done to resolve the situation
• It suggests the choices that may be available to the customer
• It sounds helpful and encouraging, rather than bureaucratic
• It sounds personal – talking about what the person is going to do to remedy the
situation
• It stresses the positive actions and positive consequences that can be anticipated
by the customer
Expressions that infer carelessness on the part of the customer:
• You failed to tell us …
• You did not confirm your request in writing …
• You did not enclose …
Expressions that infer that the customer is lying:
•
You claim that …
•
You state that …
•
According to your account …
Expressions that infer that the customer is lacking in intelligence:
•
I can’t see how you …
•
I am at a loss to know why you …
•
I don’t follow you on this point …
Expressions that infer you are putting the customer under pressure:
•
You should …
•
You ought to …
•
I must ask that you …
Positive phrasing
Thus you need to be vigilant in your choice of words when dealing with an unhappy
customer, although careful thought must also be given to the other two aspects of
communication impact (how you look, how you sound). The more positive you can
make these conversations, the easier it will be for the customer to see that you are doing
your utmost to remedy matters for them.
Examples of positive phrasing that you might want to use:
• If you can send me the missing document, then I can complete processing the
transaction for you.
• The options open to you are …
• It seems that we have a different perspective on this matter. Perhaps the best
way to move forward is for us to meet up to consider solution options?
Effective Complaint Handling
The complaints resolution model
The complaints resolution model is best described as using the following steps:
1 Empathise with the customer
2 Get all the relevant facts
3 Work to a solution
4 Check that the customer is happy with the outcome
Complaint closed off
Empathise
Check that the
customer is happy
Get the facts
Work to a solution
Quick question
How would you define empathy?
Write your answer here before reading on.
Empathise with the customer
Empathy is the ability to show another person that you understand how they feel, but
does not necessarily mean that you are agreeing with them. Empathy is quite different from sympathy which is when we feel sorry for another person, without necessarily
understanding their feelings.
Also avoid any unnecessary small talk – this will only serve to escalate the situation.
Think about a time when you have had to make a complaint and you may have
been feeling quite stressed about it, so someone talking to you about the weather, for
instance, would hardly help your state of mind! So by avoiding such remarks you can
show the customer that you are “in tune” with their feelings. They may not immediately
think in terms of “… this is great, the adviser is showing concern for my situation by
empathising …” but the power in this situation is in making a connection with the
customer’s subconscious and avoiding a confrontation.
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Complaint Handling
Quick question
If the customer is making a complaint about a charge that has been levied on their account, for
example, what could you say to demonstrate empathy?
Write your answer here before reading on.
Some useful phrases to use in this situation are:
“I can understand that you don’t want to pay charges …”
“I appreciate that you feel angry about this …”
By empathising, you are showing the customer that you understand how they are
feeling, but in neither of the suggestions above are you necessarily agreeing with what
the customer is saying. Indeed, you are not yet in a position to either agree or disagree
with them, as you have not, as yet, gathered all the facts.
A further benefit of displaying empathy is that you are attempting to remove the
aggression from the situation. Using empathy with a complaining customer is often
called “cushioning” in that you are absorbing the conflict in the situation.
Get all the relevant facts
At this point you need to allow the customer to talk, to “get things off their chest” and
to let you know what their complaint is. You need to get all the relevant information
so the customer has to be allowed to talk and you need to listen without prejudging
the situation. This is the time to use the questioning and active listening techniques
we looked at earlier. You should also ensure that you summarise what the customer
has said so that the customer can confirm your understanding of the situation. These
behaviours will also help the customer as they now feel that someone is listening to
their concerns and wants to help them.
Quick question
What actions can you take to work to a solution?
Write your answer here before reading on.
Effective Complaint Handling
Work to a solution
You have taken the “heat” out of the situation by using empathy and you have gathered
the facts from the customer. You may need to obtain more information from colleagues
or another part of the organisation to allow you to progress the complaint. If this is the
case, you should explain to the customer what you have to do and why. You should
also make a firm commitment to the customer of when you will be able to get back
in touch with them. If events conspire against you and you are not able to get all the
required information within this timescale, you should still go back to the customer
to explain the up-to-date position and to let them know what the revised timescales
are going to be.
You are now in a position to work towards a solution. The specific actions you take
will depend upon the specific complaint that you are dealing with. Here are some
suggestions:
■
Ask the customer what they would like to happen
This may seem a very obvious action to take, but not many people offer it! If you
know what the customer wants, it is much easier to give them what they want. They
may want an apology or a refund/compensation or want you to contact some third
party. For example, if an automated payment to the customer’s mortgage provider
has been set up incorrectly and the mortgage provider has advised the customer that
they are in arrears, the customer may want you to contact the mortgage provider to
explain there has been an error and to let them know when they are likely to receive
the funds.
■
Explain your organisation’s position
You may need to explain what your organisation’s complaints procedure is. If the
customer is looking for a refund of charges, you may not be authorised to make
such a refund and the matter has to be referred on. Again you should explain this
to the customer and give them timescales of when you will be back in touch.
■
Give alternative solutions if you can
If this is an option, the customer can choose which solution they prefer. Your
organisation should have a policy concerning the redress that it will offer to
customers as a result of a valid complaint being made. This may focus on monetary
as well as non-monetary compensation. Monetary awards may be along the lines of
a refund of interest and charges arising as a result of an error on the organisation’s
part, but the organisation may also be willing in certain circumstances to make
financial awards to customers. To be effective, these awards need to have some
structure around them as the organisation must be seen to be treating customers
fairly and consistently.
However, redress need not be limited to financial awards. Your organisation may
have a policy of making gifts to customers who have been the victims of service
failure and it is important that these are tailored to the severity of the error and the
customer involved. If a large corporate customer has had a series of errors posted on
their account, for example, a small gift is hardly likely to be perceived as adequate
compensation.
Your organisation may operate a policy of redress on a goodwill basis, even if there
is no fault on the organisation’s part, such as refunding a service charge on a money
transmission account if the reason for imposing the charge is a genuine oversight
by the customer.
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Complaint Handling
Check that the customer is happy with the outcome
As you come to the end of the solution stage, you should ensure that the customer is
clear about what is going to happen next. For example, you are going to make a refund
to their account, or they will be sent a letter of apology, or you are having to refer the
matter to your team leader who will contact the customer by close of business the next
day. You should also ensure that the customer is happy with your proposals.
If the customer is happy with the situation, then you have come to the end of the
process. If, however, they are not happy, you have to move into the empathy stage
again and work round the cycle again. The customer may well be happy with the way
that you have dealt with the complaint, but there may be something else they want
to draw to your attention. This stage is often missed from the complaints resolution
process as the member of staff is worried by what the customer might say at this point,
having worked through the complaints process and come to a natural conclusion. By
asking the customer if they are happy, you are demonstrating confidence and belief.
How customers respond to service failure
When considering the area of customer complaints, it can be easy to imagine that
most complaining customers are those who act aggressively and loudly. If you think
about assertiveness, you will remember that we all demonstrate different behaviours
at different times. The same is true about the way in which we respond to service
failure, and this is what we are going to consider in this section. The first thing to bear
in mind is that many victims of service failure simply choose to do nothing. At some
point, these customers will decide whether to keep their business with the organisation
or switch to a rival provider. Those who fail to complain and switch providers are the
least likely to return to the original organisation.
Customers can be grouped under four headings depending on how they respond
to service failure:
• Passives
• Voicers
• Irates
• Activists
While the proportion of the types of complainers is likely to vary from industry to
industry, these four categories will be relatively consistent and each type will be found
in all organisations and industries.
Passives
This is the group who are least likely to take any action when faced with a service
failure. They are unlikely to say anything to the firm and are less likely than the other
groups to complain to a third party. They see little point in complaining, thinking that
the time, effort and stress involved is not worth it.
Voicers
As inferred by the name, voicers are those who will actively complain to the service
provider, but they are less likely to spread negative word of mouth, to switch patronage
or to go to third parties with their complaints.
Effective Complaint Handling
These customers are very valuable to service providers as they are willing to give
them a second chance. This not only gives the firm a chance with this customer, but also
provides them with valuable feedback about how their processes and procedures can be
tightened up in order to avoid a repetition of the service failure with other customers.
Voicers have a belief in the social benefits of complaining, so they have no concerns
about voicing their complaint in the first instance. They are more comfortable about
making a complaint to the organisation, rather than spreading negative word of mouth
to third parties.
Irates
These are people who are likely to engage in negative word of mouth to friends and
relatives and also to switch providers. They are about average in their propensity to
complain to the organisation. They are less likely to give the service provider a second
chance and will switch to a competitor, spreading negative word of mouth on the way.
Activists
These consumers have an above-average propensity to complain to the provider about
all aspects of service. They will also discuss their concerns with third parties and are
willing to complain publicly about the service failures they have encountered.
This categorisation suggests that there are some customers who are more likely
to complain than others. Customers who complain often believe that their actions
will result in social benefits and expect to receive compensation. They have the belief
that fair treatment and good service are their right. They can feel a social obligation
to complain in order to help others avoid a similar failure and to punish the service
provider. A very small number of consumers have complaining personalities.
Others fail to complain as they feel that the process is pointless and they simply
do not know how to complain. In some cases people fail to complain as they feel that
they are the ones to blame for the service failure.
The personal relevance of the service failure can also affect the propensity of
customers to complain. If the service failure is of a relatively minor nature that does not
have critical consequences for the customer, they are less likely to make a complaint.
For example, we are more likely to complain about high risk services such as holidays
than less expensive products such as fast food.
Are all customers good customers?
There is an expression that the “customer is king” – or consumer sovereignty. However,
are all customers good customers? It is worthwhile giving some thought to those
customers who behave in abusive or other unacceptable ways. As with complaining
customers, it is possible to categorise awkward customers under a number of headings:
• Thief
• Rule breaker
• Belligerent
• Vandal
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Complaint Handling
Quick question
What examples can you list of thieves in financial services?
Write your answer here before reading on.
Thief
These are customers who set out to obtain products and services without paying for
them. While it is easy to think of this only being a problem for organisations that
sell tangible goods which can be taken away, the concept applies just as much to the
financial services sector. Fraud comes under the category of theft and can be manifest
in a number of different ways, such as credit card fraud, identity fraud, forgery, etc.
Rule breaker
Organisations need to put in place a number of rules for both staff and customers to
follow. Much of this focuses around a need to provide consistent decision making across
the organisation. This is particularly true when the organisation is geographically
dispersed, such as a retail bank.
An example of rules that the organisation may communicate to customers concerns
charging policy. Financial services firms publish tariffs of the levels of fees charged for
items returned unpaid, unarranged overdraft letters, loan arrangement fees and so on.
A number of customers will seek to exempt themselves from these rules by challenging
their imposition and expect to be dealt with as “special cases”. The challenge for any
organisation in this situation is to deliver consistent service while having a concern
for the needs of the individual customer.
Belligerent
Working with the public, you no doubt have personal experience of particular
customers for whom your organisation can do no right! They seem to wish to complain
about the slightest thing – down to the fact that the sun shines in the ATM screen!
Dealing with large numbers of customers can make it impossible for the organisation
to eliminate this type of customer. The approach to be taken is to invest in the training
and development of staff in effective ways with which to deal with this type of
customer. The establishment of customer service standards can also help, as this type
of customer can be directed to these standards to let them know what the organisation
has committed to provide and what it has not.
Vandal
As most financial services firms have a presence on the high street, they can be subject
to wanton acts of vandalism, which although not necessarily caused by customers,
can affect the public perception of the organisation. If you were thinking of moving
your account, would you be tempted to move to one whose ATM is covered in mess?
An effective way to deal with vandalism is to try to prevent it from happening in the
first place. Improved security, better lighting and the use of vandal-resistant materials
can help here.
Effective Complaint Handling
Relationships with customers
Of course, the vast majority of customers do not fall into any of these categories, but
organisations need to have a clear view of the type of customer they need to attract to
deliver their strategic vision. Given that financial services firms are looking to engage
in long-term relationships with customers, it would then appear foolish to refuse to
engage with new customers, or to terminate relationships with existing customers,
although from time to time these events will happen.
The assumption that all customers are good customers belongs to a past age. Indeed,
many of the customers who were deemed in a branch to be “good customers” were
possibly those who were very effective in negotiating terms with their local manager
that were more in favour of the customer than the bank. It was only in the 1980s that
firms were willing to tell staff that good customers were profitable customers. Up until
then, many bank staff were of the opinion that “good customers” were those who
were affluent and had negotiated very good deals (for themselves) with the bank. The
reality of the situation was that very little, if any, profit was made from these customers,
therefore long-term relationships with unprofitable customers will be avoided.
At the individual level, there is little point in engaging in a relationship with a
customer who has a poor repayment history, or whose credit history is unreliable
in some other way. This extends beyond the provision of banking services – many
insurance companies will decline to quote for business if they feel that the customer
does not match their target market segment or represents too high a risk.
In addition to the likely financial costs associated with attracting the wrong type of
customer, a substantial amount of time will be spent dealing with them, making them
unprofitable for the organisation. Dealing with this type of customer may also place
unacceptable levels of stress on employees, which may result in a declining level of
service quality to other customers.
Quick question
What are the most common types of complaint you have to deal with in your current role?
Write your answer here before reading on.
Typical complaints
Obviously, the types of complaint that you may have to deal with can vary depending
on the role you have in the organisation, whether you are dealing with customers face
to face or on the phone. Some customers will complain about the imposition or level of
charges, or the type of service provided by the organisation; for example, the incorrect
setting up of an automated payment, the decline of a credit request or the features of
a product. Other complaints may derive from a more public arena, such as the misselling of endowment insurance or, more recently, PPI cover.
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In today’s highly competitive financial services market, many firms aim to attract
new business by making introductory offers to new customers of preferential terms
and conditions when they transfer their business. While this tactic can be successful in
obtaining new business, it can also lead to dissatisfaction amongst existing customers
whose accounts are subject to the same terms and conditions as before and they may
feel that their loyalty to the organisation is not being recognised. Their response to
this may be to transfer their business to a competitor firm which is offering similar
lucrative deals, or they may choose to raise a complaint with their existing provider,
as in the following case.
Case study
George Bream
Worldwide Bank has recently launched an integrated current account which
combines savings, money transmission, personal lending and mortgage facilities.
As a result of customers effectively being able to offset their savings against their
borrowing, the amount of interest payable on their borrowing is substantially
reduced. Reducing the capital balance on a mortgage is thus accelerated, which
means that the customer’s mortgage runs for a substantially shorter period of
time and the amount of total repayments is reduced.
From Worldwide Bank’s perspective, this type of account needs to be offered
to the market for Worldwide Bank to remain competitive, it ties customers into
a long-term relationship and enables the offering of a wider range of financial
products and services to the customer.
To support the launch of the product, Worldwide Bank has invested in a
promotional campaign, and a number of existing customers have been
approached with an offer of access to this new type of account.
A couple of months after the launch, you are contacted by George Bream who
has maintained his business and personal accounts (including a mortgage) with
your branch for a number of years. He is a well respected local businessman
whose business has been a profitable connection for the bank. George is irate
that the existence of this new account has only come to his attention through a
conversation he had with a business associate who had been offered the new
account and was saying how many advantages it had: why had George not
heard about it?
During your telephone conversation with George, he not only expresses his anger
and disappointment at not being offered the account, but also says that the bank
must now owe him “thousands of pounds in interest” which he has paid on his
mortgage over the years.
The basis of his argument is that he has always maintained a sizable balance in
his money transmission account and had this been offset against his mortgage,
he would have paid much less mortgage interest over the years.
Effective Complaint Handling
Quick question
How would you respond to George?
Write your answer here before reading on.
At this point, it’s useful to recall the complaint resolution model we looked at earlier.
The four phases of the model are:
• Empathise
• Get the facts
• Work to a solution
• Check that the customer is happy with the outcome
Remember also that when communicating, the impact is:
• How you look: 55%
• How you sound: 38%
• What you say: 7%
The words that you use with this customer are vitally important, but it is
also important to show him that you are empathising through both non-verbal
communication and the tone of your voice. You must appear sincere and adopt an
assertive, solution-focused mode of communication. As well as empathising in a nonverbal manner, you should also use some empathetic words. The words each person
uses can vary and you certainly want to avoid this customer feeling that you are dealing
with a routine matter. Therefore you want to say something along the lines of: “I can
see that you are unhappy about this error …”
You want to find out why Mr Bream has not been offered the account. In this example,
we’ll assume that this was simply an oversight on the bank’s part. Acknowledging this
oversight, it is appropriate to offer an apology. Remember that you are apologising on
behalf of Worldwide Bank. Even though you were not personally responsible for the
oversight, you should not waste this customer’s time explaining at length why you
are not to blame. This will only make the situation worse.
Having obtained all the relevant facts, you can now work towards a solution. In
this case, you could offer to open the account for him and arrange to have the account
set up. Great care must then be taken to ensure that the process is carried out without
any further errors and that any timescales communicated to him are adhered to. It is
also good customer relationship practice to keep in touch with George Bream during
this transition phase to ensure that he is happy with the way things are progressing.
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Complaint Handling
Quick question
How would you deal with George’s insistence that he be refunded “thousands” of pounds of
overpaid interest?
Write your answer here before reading on.
With this particular complaint, George Bream may expect Worldwide Bank to make
a payment to him for the amount of interest he has overpaid since the introduction of
the integrated current account. However, no matter how good a customer he is, it isn’t
practical for Worldwide Bank to backdate this payment to the opening of the mortgage
account many years before.
This fact needs to be explained to him in a tactful way, along the lines of: “In common
with all banks, Worldwide Bank regularly reviews its products and services and it’s as
a result of such a review that this new integrated account was developed. However, as
with any business, it’s not possible to backdate the benefits of a new product to a time
when the product was not in existence. Therefore the offer that is being made to you is
to compensate you for the extra interest you have paid as a result of the bank’s error”.
Hopefully, this tactic will resolve the matter. If not, there may be other compensation
that Worldwide Bank can offer in line with its own policies and procedures. However,
were you to accede to this customer’s request, you are leaving the door open to a host
of other customers looking for compensation for “additional” interest paid over the
years, which would not be a sustainable position for the bank to be in.
Depending on the structure of your organisation, other members of staff may need
to be involved in this solution and the communication of it to the customer, for example
a colleague who is Mr Bream’s business relationship manager.
At the end of this process, it is important that you check with the customer that
he is happy with the solution you have offered. There is no point investing time and
effort in this process, only to find that you have not given the customer what he feels
he is entitled to and as a result, his business is transferred anyway.
Finally, keep in mind that you must communicate to the customer in an assertive
manner throughout the interaction.
Quick question
What do you understand by the term “customer life cycle”?
Write your answer here before reading on.
Effective Complaint Handling
The customer life cycle
The customer life cycle is a way of forecasting likely customer behaviour by mapping
out the life cycle of a customer’s interaction with the organisation and its services. The
life cycle can be thought of as a corridor: the customer enters the corridor at one end
and each door along the corridor represents an interaction with the organisation. For
a bank, possible doors are:
• Opening the account
• Registering for direct banking provision
• Opening an ISA
• Buying foreign currency and arranging travel insurance
The customer travels along the corridor until they reach the end when their
relationship with the organisation ceases.
Customer complaints procedure
To conclude this chapter, we’ll look at a standard Customer Complaints Procedure for
a fictitious organisation – National Bank. As each organisation develops a complaints
procedure that fits its own profile, business and strategic direction, it is highly unlikely
that the procedure given here will mirror exactly that used by your organisation, but
it will give you an idea of the form and content.
Once you have studied this standard procedure, you should compare it with that
used by your organisation, identify the key differences and reflect on the reasons for this.
For example, is it because of the size of your organisation or possibly the customer mix?
National Bank
Customer Complaints Procedure
Procedures for Complaints Made In Person or by Telephone
• Stage One
If a customer is unhappy with some aspect of our service, then they are
requested to raise their complaint with a member of branch staff, as soon as
possible after the incident occurred.
• Stage Two
If the member of staff is unable to resolve the complaint, then the member
of staff dealing with the customer will pass the complaint on to the next level
manager.
• Stage Three
If this manager is unable to resolve the complaint and the customer wishes to
escalate matters, then the customer must be advised to put their complaint in
writing to:
The Customer Satisfaction Manager
National Bank
Head Office
12 Main Street
Anytown AN1 1BK
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Complaint Handling
• Stage Four
If the complaint still cannot be resolved, then the customer may refer the matter
to the Financial Ombudsman Service at:
The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
LONDON E14 9SR
Telephone 0845 080 1800
E-Mail
[email protected]
Website
www.financial-ombudsman.org.uk
Procedures for Complaints Made by Letter
• Stage One
Customers are requested to forward the letter of complaint to the person with
whom they have been dealing.
• Stage Two
If this person is unable to resolve the complaint and the customer wishes to
escalate the matter, then the customer should be requested to write to:
The Customer Satisfaction Manager
National Bank
Head Office
12 Main Street
Anytown AN1 1BK
• Stage Three
If the complaint still cannot be resolved, then the customer may refer the
matter to the Financial Ombudsman Service at:
The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
LONDON E14 9SR
Telephone 0845 080 1800
E-Mail
[email protected]
Website
www.financial-ombudsman.org.uk
Branch Procedure When Dealing With Complaints
If the complaint can be resolved by close of business the day following receipt of
the complaint, no documentation need be completed.
If the complaint cannot be resolved by close of business the following day, then
the following action must be taken:
• A customer complaint form must be completed
• The complaint should be investigated
• Within a maximum of five working days, a letter must be issued to the customer,
together with a National Bank Complaints Procedure Leaflet either responding
to the customer complaint or advising them that their complaint is still under
investigation.
Effective Complaint Handling
• For those complaints where investigations extend beyond five working days,
a final response or a holding response, explaining why the Bank is not yet in
a position to resolve the complaint and indicating when the Bank will make
further contact must be sent to the customer within two weeks of receiving
the complaint.
• For those complaints where investigations extend beyond two weeks, a final
response must be sent to the customer within four weeks of receiving the
complaint.
NB – Final response letters being sent to customers should include a copy of the
Financial Ombudsman Service leaflet.
Complaints need only be referred to the Customer Satisfaction Manager if the
customer expresses dissatisfaction with the Branch’s final response. If this is the
case, the complaint form should be forwarded to the Customer Satisfaction Manager
along with all related correspondence.
Head Office Procedures
When a complaint is received from the Branch, the Customer Satisfaction
Manager must, within eight weeks from receipt of complaint at Branch, send the
complainant either:
• A final response; or
• A response which:
– Explains that the Bank is not in a position to make a final response, gives reasons
for the further delay and indicates when it expects to be able to provide a final
response; and
– Informs the complainant that they may refer the complaint to the Financial
Ombudsman if they are dissatisfied with the delay and encloses a copy of the
Financial Ombudsman Service’s leaflet.
Branch Return Record of Complaints
• A half yearly return should be submitted to Risk & Compliance Department as
at close of business: 30 April and 31 October. This one, two page return covers
all customer types.
• Completion of the detailed information on the cover sheet of the return allows
branches to transfer figures to the relevant sections on the second page.
• Details of the account number and account holder name(s) require to be
reported for every complaint.
• Complaints Outstanding at Reporting Period Start Date – this information should
reflect that of the period end information provided on the previous return.
• Complaints Opened During Reporting Period – this section relates to the new
complaints received by the branch during the reporting period. This information
is broken down to provide details of:
• The product/service grouping relating to the complaint, eg Banking, Home
Finance or General Insurance
• The type of account the complaint relates to, eg if the grouping was Banking,
this could be either Current Account, Unregulated Loans or Savings and other
accounts
• Reason for the complaint.
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Complaint Handling
• Complaints Closed During Reporting Period – The information required in this
section relates to complaints, outstanding for more than 48 hours, settled by
the branch during the reporting period. This information is broken down to
provide details of:
• The product/service grouping relating to the complaint, eg Banking, Home
Finance or General Insurance
• Period within which the complaint was closed • Any complaints upheld by the Bank • The amount of any redress/compensation paid to the customer as a result of
a complaint – this does not include any refund of charges within 48 hours of a
complaint being made by a customer. • Complaints Outstanding at Reporting Period End Date – The details of any
complaint which remains outstanding on the last day of the period end, i.e. 30
April and 31 October, must be shown here. This information will be used by the
branch as the opening figure for their next return, i.e. Complaints Outstanding
at Reporting Period Start Date.
• Copies of completed complaints forms, and all other associated paperwork for
each individual complaint, should be attached to the half yearly return before
submitting to Risk & Compliance Department.
• The return must be signed by the Account Manager and a copy retained within
the branch for information purposes only.
Customer Complaint Form Definitions
Product/Service Groupings
The complaint is split into three Product/Service Groupings – Banking, Home
Finance and General Insurance. These Groupings are then sub-divided by the type
of account the complaint relates to:
• Banking
Current Account
Basic Account
Prestige Account
No Frills Business Account
Enhanced Business Account
Transition Account
Unregulated Loans
Personal Loan
Car Loan
Home Improvement Loan
Savings and other accounts
Savings Account
Notice Account
Premium Account
Monthly Income Account
Fixed Term Account
Cash ISA Account
Effective Complaint Handling
Money Market Account
Trust and Executry Account
• Home Finance
Regulated Home Finance Products
Equity Release Account
Traditional Mortgage
Current Account Mortgage
Bridging Loan
• General Insurance
Payment Protection Insurance
Personal Loans
Complaint Categories
There are 5 categories to choose from:
• Advising, selling and arranging
• Terms & disputed sums/charges
• General admin/customer service
• Arrears related
• Other
Complaints Handling Where Financial Difficulty Is Claimed
These are the minimum standards for handling complaints where financial difficulty
is claimed:
1. The Bank must use its own records, where available (eg account activity and
existing borrowing), to consider initially if the customer may be experiencing
financial difficulty. Only when this cannot be determined will it be appropriate
for staff to gather more information, i.e. issue an Income & Expenditure form. It
is accepted that in a majority of cases it will be necessary to issue an Income &
Expenditure form, in particular before considering rejecting a claim of financial
difficulty.
2. If an Income & Expenditure form is issued, the Bank must provide a reasonable
period of time before issuing a rejection letter to the customer, which should
clearly explain the reason why the Bank has not accepted that the customer is in
financial difficulty, and that the Bank will reopen the case should the customer
subsequently return the Income & Expenditure form.
3.Where an Income & Expenditure form is returned, it must be reviewed
by adequately trained and experienced staff to assess if the customer is
experiencing financial difficulties and the extent of the problem. Staff should be
able to interpret information to make an informed judgement which is clearly
documented and in line with Bank policy and guidance (including considering
if a customer may have under declared their outgoings). An appropriate course
of action should be taken dependent upon the extent of the problem, i.e. some
customers may only require guidance on what to do; others may require more
immediate action.
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4. Any correspondence issued to the customer that provides detail on the decision
taken by the Bank must be compliant with the FSA Dispute Resolution manual
requirements, eg it should clearly explain the outcome of the investigation
and the rationale for the decision, and provide details of how to escalate the
complaint if the customer is not happy with how it has been resolved (this
includes cases rejected because the customer did not return an Income &
Expenditure form).
5. The Bank will provide a range of measures to support customers, and to treat
them positively and sympathetically. These might include: help and guidance
about dealing with financial difficulty and avoiding charges; suspending
collections and recoveries activity; suspending the accrual of further interest
and charges; and a consideration of the refund of charges, in particular where
the charges may have added to the financial difficulty during, or immediately
before, the period of financial difficulty. The rationale for why a particular level
of refund has been given should be documented and clearly explained to the
complainant.
Effective Complaint Handling
Review
Now consider the main learning points which were introduced in this chapter.
Go through them and tick each one when you are happy that you fully understand
each point.
Then check back to the objectives at the beginning of the chapter and match them to
the learning points.
Reread any section you are unsure of before moving on.
Communication is the transference of information from one person to another.
Both parties should be active participants in the process.
Questions can be classified as open, closed, probing, reflective and
summary/clarifying.
We can show another person that we are listening to them by using
active listening techniques.
Transactional analysis tells us that when we communicate we will be
in one of the following ego states – parent, adult or child.
Assertiveness is about behaving appropriately, honestly and authentically
with the people around us.
The four behaviour types associated with the study of assertiveness are:
passive, manipulative, aggressive and assertive.
Positive language has a profound effect on the way in which our
communication is received.
The complaints resolution model components are: empathise, get the facts,
work to a solution, check that the customer is happy with the outcome.
Many customers respond to service failure by either doing nothing or
moving their business away from the service provider. Others can be
categorised as passives, voicers, irates or activists.
Awkward customers can be described as thieves, rule breakers,
belligerents or vandals.
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Complaint Handling
Key words in this chapter are given below. There is space to
write your own revision notes and to add any other words or
phrases that you want to remember.
open/closed/probing/reflective/summary/clarifying questions
active listening
controlling/nurturing parent
free/natural/adapted child
passive/manipulative/aggressive/assertive
positive language
complaints resolution model
empathy
redress
passives/voicers/irates/activists
thief/rule breakers/belligerent/vandal
customer life cycle
customer complaints procedure
Effective Complaint Handling
Multiple choice questions
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5
Try these self-test questions to assess your understanding of what you have read in this chapter. The answers are at the back of the book.
1 When communicating face to face, the impact of the words that we say is:
A
55%
B
7%
C
38%
D
83%
2 “How can I help you today?” This is an example of:
A
an open question
B
a closed question
C
a reflective question
D
a probing question
3 Using jargon that the customer does not understand will present a barrier to your communication
with them. This is an example of:
A
an environmental barrier
B
a perceptual barrier
C
a psychological barrier
D
a linguistic barrier
4 If a customer tells you that they are unhappy with your “attitude” and the fact that you are
constantly making errors on their account, they are most likely to be in which one of the following
ego states:
A
nurturing parent
B
controlling parent
C
adapted child
D
free/natural child
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Complaint Handling
Multiple choice questions
5
5 The phrase “I’m not OK, you’re OK” most accurately describes which one of the following
behaviour types:
Apassive
Bmanipulative
Caggressive
D
assertive
6 The ability to show another person that you understand how they feel is called:
Asympathy
Bcompassion
Cintuition
D
empathy