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information for smaller businesses

video-guide for smaller businesses

Caroline Wells outlines the work of the ombudsman service

Hello and welcome to the Financial Ombudsman Service. I'm Caroline Wells, the external liaison manager.

We've made this video with the smaller business in mind - the kind of business that very rarely gets customer complaints - and probably has very little contact with the ombudsman service.

In this video we explain briefly how the ombudsman service works. And what would happen if a customer of yours referred a complaint to us. I'll also be introducing some of my colleagues, who will talk through the different stages of the ombudsman process.

Now we all know despite our best efforts, things don't always go to plan. Disputes can arise in the best of businesses.

Taking the time to deal with complaints well, can help to retain customers and building the good reputation of your business - something which is more important than ever in today's climate.

You're the one best placed to show your customer that they matter to you. A lot of complaints arise from simple misunderstandings. So even if you think that you're right and that the customer is wrong, this is your opportunity to nip things in the bud - by explaining clearly and showing that you care.

Our guide the ombudsman and smaller businesses - available on our website - explains more about what you need to do if a customer complains about your business. A lot of the requirements and procedures you have to follow are simply good business practice - and good customer relations.

But you still have to know the rules - and follow them - when it comes to things like acknowledging complaints, and dealing with them within the required timescale.

You have up to eight weeks in which to resolve a complaint from a consumer yourself. By this time you have to give the consumer our leaflet, your complaint and the ombudsman - and tell them they can officially go to the ombudsman if they're still not happy.

Details on how to get hold of our consumer leaflet are on our website.

Sometimes consumers bring complaints to the ombudsman service before they've complained to the business they're unhappy with. In these cases we always refer the complaint back to the business - giving you the opportunity to look into things first of all.

But if we're satisfied that you've had enough time to settle the complaint - and the consumer comes to us to tell us they're still unhappy - that's when we get involved.

In these cases, you'll hear from our front-line customer-enquiry team - run by my colleague Paul Kendall

Paul Kendall on complaints prevention

My name's Paul Kendall. Me and my team help sort out complaints at the front-line, when they first arrive at the ombudsman service.

Every day we deal with over 5,000 phone calls, emails and letters from consumers - about a million every year.

In many cases, we can sort things out, just by explaining that consumers need to complain first to the business they're unhappy with.

We also explain how the complaints procedure works. We refer consumers to other helplines and websites. And we offer practical suggestions on how problems could be sorted out without our official involvement.

In around one in six enquiries, we do get involved more formally. This is where it looks like the customer has already complained to the business involved - but the complaint remain unsettled after eight weeks.

In these cases, me and my team sort out the paperwork and the details we need, to take the complaint on as a formal “case”.

For this to happen, the customer has to fill in our complaint form. This is sometimes done over the phone or online on our website. We'll write and tell you as soon as we receive a complaint form about your business.

By this time you should already have investigated the complaint yourself. So all you have to do initially is send us your final response letter that you sent your customer rejecting their complaint.

Your final response letter - and the complaint form from the consumer -are our starting points for getting to the bottom of what the complaint's all about.

At this stage we check that the complaint looks like it properly comes under our formal jurisdiction. So it's important that you tell us as soon as possible, if you don't think it does.

Once we've made these initial checks and we've gathered all the paperwork, we pass the file to one of our specialist casework teams here at the ombudsman service. These teams are run by managers like Asher...

Asher Gordon on the work of the adjudicators

Hi. I'm Asher - and I'm a casework manager. I run a small team of adjudicators who work at resolving individual cases.

The adjudicators I work with are drawn from a range of backgrounds - including the law, accountancy, financial advice and regulation. They have financial-services qualifications, law degrees and are experts in a range of specialist subjects.

But the real strength of our adjudicators is their ability to stand back impartially - and look at a problem with a fresh eye.

Our aim is to resolve as many complaints as we can informally - getting both sides to agree at an early stage, without a need for lengthy, drawn-out investigations.

By focusing on what the two sides can agree on, and finding common ground, we're usually able to negotiate a constructive way forward that is satisfactory to both sides.

Mediating a settlement like this means we do not have to apportion blame for what may have gone wrong in the past. And it also means a more positive relationship between you and your customer going forward.

We're able to take this flexible approach to resolving cases because the law requires us to consider each case individually on its particular facts and merits.

Where we think our informal approach isn't suited to a particular case - or where one side or the other don't want to agree to any informal settlement - our adjudicator can issue an “adjudication”. This is a document that sets out more formally our recommendation as to whether a complaint should be upheld or not.

We want to hear your side of the story - so it's important that you answer our questions and send us the documents you're basing your arguments on. You must do this promptly. If you miss the deadlines we set, we'll make decisions based on the information we have already.

It is also important that you tell us promptly if you think we've got things wrong. Engage with the arguments - but don't get lost in the detail. And always back up what you say with clear evidence.

You are the professional - and so we expect you to stay calm and courteous - even if you dislike or disagree with what we say.

Our adjudicators are usually able to resolve nine out of ten cases by making informal recommendations - or issuing more formal adjudications. It may be the first time you've had a complaint like this. But we will usually have seen very many similar cases. So we know exactly what questions to ask and what approach to follow.

If either you or the consumer are unhappy with the adjudicator's approach on a particular case, then either of you can ask for it to be referred to an ombudsman. This actually happens in fewer than one in ten cases - usually the most difficult or entrenched disputes which require a formal decision by an ombudsman to settle the matter once and for all.

Caroline Mitchell on the ombudsman's final decision

My name is Caroline Mitchell - and I'm an ombudsman. I make final decisions in the most difficult and hard-fought of cases.

I review and decide on complaints concerning investments, pensions and mortgages, and I have a team of specialist ombudsmen working with me in those areas. We also have specialist ombudsmen dealing with general insurance complaints and banking and credit.

We work closely with adjudicators - they're able to settle most complaints at a much earlier stage in the process, without the need for ombudsmen involvement. Adjudicators have a close understanding of the ombudsman's approach to issues and they can use that in their day-to-day work.

My role as ombudsman is pretty formal. That's because I get involved in the final stages of our process. I have the last word.

By the time I review and issue a decision in a case, it will already have been carefully considered by at least one adjudicator. And you will have had a chance already to produce all your evidence and arguments.

So don't leave it till an ombudsman has issued their final decision - and only then start to get involved. By then, you'll have left it too late.

In a way, ombudsmen are like judges in a court of law. An ombudsman's decision is legally binding - if the consumer accepts it. And they're enforceable through the courts. So you have to comply with it.

But we don't cross-examine witnesses, take evidence on oath, or hold hearings as a matter of routine.

We make review cases on the paperwork - and reach decisions on the basis of what we consider to be fair and reasonable in the individual's circumstances of the case. And to do this, we take account of the law, rules and regulations, and good industry practice.

But we don't apply rules and regulations retrospectively. We look at what happened - or should have happened - at the relevant time.

And we decide cases on a balance of probabilities - that means on what is more likely to have happened and it's similar approach to a civil court of law.

So we don't ignore what the law says. And we have our own legal framework to follow. In fact I'm a lawyer myself. But this doesn't mean resolving complaints has to be legalistic - or in legalese.

And unlike the courts, we're able to settle the vast majority of our cases informally without the need to use our full ombudsman powers.

And unlike the courts, we're actively involved in outreach and complaints-prevention work - designed to help you resolve any problems yourself, before they escalate into full-blown disputes.

Now over to our Caroline Wells - our external liaison manager.

Caroline Wells on helping smaller businesses sort out complaints

Yes, the Financial Ombudsman Service dedicates a lot of resource to complaints prevention - helping businesses and consumers get a better understanding of what leads to complaints in the first place, and how they can be sorted out without the ombudsman ever having to get involved.

We believe there are lessons to be learned by everyone from the thousands of complaints we settle each month.

Our complaints-prevention and outreach work is based on giving you feedback from real-life cases - so you can see where things have gone wrong and how they might have been avoided in the fist place.

Our newsletter, ombudsman news, includes case studies and examples of complaints we've handled recently - as well as a questions & answers page and special features on complaints-related topics.

You can subscribe free-of-charge to our ombudsman news mailing list. Or search online on our website for case studies on the topic you're interested in - everything from spread-betting to pet insurance.

We also have a range of publications for businesses, including a series of quick guides, more technical information on specialist subjects, and our special guide, the ombudsman and smaller businesses.

You can pick up any of these publications - or ask us questions in person - at the many events we take part in around the country, including trade shows, exhibitions and industry roadshows.

Or you can phone our technical advice desk - our dedicated helpline for professionals in the financial services sector.

Our technical advice desk can help give a steer on how the ombudsman might approach a particular issue - and point you in the right direction for more information on solving a problem before it becomes a complaint.

I hope this short video has been of interest. We've tried to cover very briefly a lot of aspects of our work here at the ombudsman service.

If you'd like more information - or have any questions about that you've seen today - please contact us. We'd like to hear from you.

Meanwhile, thank you for taking the time to watch this video.