LLOYDS BANKING GROUP COMPLAINT HANDLING POLICY SUMMARY FOR THIRD PARTY SUPPLIERS

Transcription

1 COMPLAINT HANDLING POLICY SUMMARY FOR THIRD PARTY SUPPLIERS RATIONALE Lloyds Banking Group (the Group) provides a broad suite of mainstream financial services products (retail, corporate, commercial, and insurance) to support our customers goals and our vision to be the Best Bank for Customers. The Group Complaint Handling Policy (GCHP) is also integral to that vision. This Policy defines the Group s framework for: Delivering fair outcomes for customers who complain; and Learning from complaints by identifying and mitigating the underlying causes of them. It also sets out how we deliver the expectations of our regulators, in particular regulatory complaint handling rules (DISP) provided by the Financial Conduct Authority (FCA) and high level guidance provided by the Financial Ombudsman Service (FOS). Policy Risk Appetite Lloyds Banking Group seeks to lead the industry in its approach to complaint handling. This is defined as: The Group has a mature complaint handling framework including procedures, training and competence and outcome testing demonstrating fair customer outcomes; The Group has clear performance metrics in place that demonstrate the performance of complaint handling in relation to fair customer outcomes (see below for further definition); Complaint Handling results are consistently within risk appetite and robust root cause analysis is used to analyse performance with clear actions agreed to drive continual improvement; Learning from complaints is fed back to the relevant business area as well as the wider Group; and Risk Function Assurance activity validates business area complaint handling processes for those areas outlined in the table below. CUSTOMER OUTCOME FACTORS Meets Customer Needs Compliant Information Disclosure Area of focus for Complaints Handling An appropriate solution to remedy the complaint, taking into account the customer s circumstances, is provided. All key information has been provided to enable the customer to make a fully informed decision or our communication clearly sets out the rationale for any decision we have taken. Regulatory All relevant regulatory requirements have been Page 1 of 9

2 Compliance Internal Process Compliance complied with. All internal processes, over and above those required to Meet Customer Needs, satisfy Compliant Information Disclosure and Regulatory requirements, have been followed. Complaint metrics are agreed by the Board Risk Committee and will be tracked and reported monthly to the Group Risk Committee. SCOPE This third party version of the Policy applies to all suppliers to Lloyds Banking Group who interact with customers or handle all types of complaints (as defined below), regardless of how they are received, in relation to the provision of products and services by, or on behalf of, any brand or business in the Group. Complaint Definition The Group defines a complaint as any oral or written expression of dissatisfaction, whether justified or not, from or on behalf of a person or business, about the provision of, or failure to provide, a financial service, which alleges any actual or potential financial loss, distress or inconvenience. MANDATORY REQUIREMENTS GENERAL The supplier must ensure all complaints relating to the provision of products and services by, or on behalf of, any brand or business in the Group are handled in accordance with relevant regulatory rules and guidance including the FCA's Sourcebook DISP and FOS Guidance, together with the following 11 Principles: Complaint Handling Principles 1. CONSUMER AWARENESS: Customers will be made aware of how to complain about any Group product or service. 2. RECEIVING A CUSTOMER COMPLAINT: Suppliers will make it easy for a customer to complain. 3. CLARIFICATION OF THE COMPLAINT: Suppliers will make sure that they understand the nature of the customer s complaint - seeking further information if needed. 4. KEEPING THE CUSTOMER INFORMED: Suppliers will keep the customer informed of the investigation of their complaint. 5. ASSESSING THE MERITS OF THE COMPLAINT: Suppliers will investigate complaints competently, diligently and impartially and assess the merits fairly, consistently and promptly. 6. COMMUNICATING OUR DECISION: Suppliers will communicate their decision clearly and promptly, explaining why they have upheld or rejected the complaint and the reasons for any redress award. 7. THE SOLUTION: Where a supplier upholds a complaint the supplier will put the customer back into the correct position. Where a complaint is rejected but suppliers choose to make a payment to the customer, suppliers must ensure this fairly reflects the circumstances of the case. Final Version 12 June 2017 Page 2 of 9

3 8. DEALING WITH COMPLAINTS REFERRED TO FINANCIAL OMBUDSMAN SERVICE (FOS): Suppliers will cooperate with the FOS, and any other complaint arbitration body (arbitrators), and comply promptly with all decisions, settlements or awards made. Final decisions issued by the FOS, or other arbitrators, which change the complaint outcome will be reviewed, and suppliers will take into account the reason for the change when dealing with other complaints of a similar type. 9. QUALITY ASSURANCE: Suppliers will ensure consistently fair complaint outcomes are achieved through outcome focused quality assurance, which is robust and timely. For further guidance see Customer Treatment 3rd Party Policy 10. LEARNING FROM COMPLAINTS: 10.1: Suppliers must record all complaints fully and accurately to enable identification and recording of the underlying causes of complaints. 10.2: Suppliers must analyse complaint root cause information, and use this analysis to identify opportunities to improve customer products and services.. Suppliers must record the measures taken to address the problem, evaluate the potential customer benefit of improvement opportunities and where appropriate take action to prioritise and implement them. 10.3: Suppliers will consider the wider implications of complaints for customers who have not complained and, where necessary, take appropriate action. 11. RECORD KEEPING AND MANAGEMENT INFORMATION (MI): Suppliers will maintain systems for recording complaints to facilitate production of MI in a manner that supports both effective complaints root cause analysis and any reporting requirements that the Group may have specified. Records will be retained as a minimum, for the relevant period required by FCA DISP rules. Consideration must also be given to the Group Third Party Supplier Records Management Policy. Additional Related Procedures The Group's Complaint Handling Policy is supplemented by more detailed Procedures as set down below: 1. Communications Procedures for communicating with customers 1.1: Delivering consistently fair outcomes for our customers is critical to the success of our business. The way in which you, as our supplier communicate with our customers is a key component in ensuring we achieve this objective. Suppliers must make sure customers are aware of how to make a complaint, are kept informed on the progress of a complaint and be advised of the outcome of any investigations. 1.2: Customers must be able to make their complaint by any reasonable means and must not be required to put their concerns in writing. Suppliers must take care to listen to and acknowledge the customers concerns and make a robust record of the customer complaint in a durable format. When a customer with a previous complaint makes contact with us again we must always check whether the issue is related or unrelated to the original complaint. A case can be re-opened regardless of the time which has elapsed since the original complaint. The following provides guidance on whether a complaint should be reopened or a new complaint opened. Page 3 of 9

4 1.3: Suppliers must manage customer expectations by providing details of proposed actions and/or next steps, for example by providing an overview of: The complaints process; Any likely hand-offs to specialist complaint areas; and Likely timescales, as appropriate (bearing in mind the complaint type and/or complexity). 1.4: Where a complaint is resolved within three working days, the supplier must communicate the resolution to the customer. How they do this must be in line with local processes, which must meet the applicable regulatory requirements. Where a complaint is not resolved within three working days, the customer must be sent a written acknowledgement within 5 working days of receipt of the complaint. Where this is the case, regular updates should generally be sent at least every 4 weeks. Where the customer requests additional (or less frequent) updates Suppliers must make every reasonable effort to meet the customer s request. 1.5: All updates must detail: progress made to date; the measures being taken to resolve the matter; and the expected resolution date or date of next update. If, despite their best efforts a Supplier has been unable to provide a final response within 8 weeks the supplier must send a written update to the customer. This update must: Explain why the Supplier is not in a position to issue a final response; Indicate when the Supplier expects to provide a final response; Where eligible inform the customer they may now refer the complaint to the Financial Ombudsman Service (FOS) or equivalent arbitration body, including any relevant information; and Include any agreed wording. 1.6: A customer whose complaint is resolved, orally or in writing, after close of business on the third business day following receipt, must be sent a final written response. Suppliers must make all reasonable efforts to send this within 8 weeks of receipt of the complaint. The final response is a written response which: Upholds the complaint in full or in part and, where appropriate, offers redress or remedial action with an explanation of what is being offered and why; or Final Version 12 June 2017 Page 4 of 9

5 Offers redress or remedial action without upholding the complaint; or Rejects the complaint and gives reasons for doing so, and Includes appropriate referral rights if the customer is eligible (or might be eligible) to refer their complaint to an arbitration body: and Includes any agreed wording such as in relation to jurisdiction. 1.7: All communications. All written communications with customers need to be clear, concise and satisfy the following requirements; Avoid the use of unexplained technical terms, jargon and abbreviations. Where use of such terms is unavoidable, a clear explanation must be provided; Set out in a logical structure, order and format, and show key information prominently; Where standard paragraphs are used, these must be relevant and, where appropriate, tailored to the specific circumstances of the case; and Take into account any relevant previous communication with the customer regarding the matter that is being complained about. Suppliers must treat customers in vulnerable circumstances appropriately and tailor communications to their needs. Where it is specified that a communication must be provided in writing, suppliers must in addition provide the information in a different format, such as via a phone call, if that would better meet the customer s needs. 1.8: Considering the Bigger Picture In some cases suppliers might identify ways in which they could assist the customer outside of the complaint handling process. For example, customers identified as potentially experiencing financial difficulty should receive information about the support available, and where appropriate be referred to the relevant area of the business for additional assistance. There will also be cases where it becomes apparent that the customer s concerns or dissatisfaction relate to wider or deeper issues in their lives, such as money, health or relationship worries. In such cases, suppliers must use their judgement, consulting with other colleagues if necessary, to determine whether it would be appropriate to signpost the customer to appropriate sources of support. When dealing with complaints from customers who are clearly not eligible to take their complaint to the UK Financial Ombudsman Service or equivalent arbitration body, 1.4 to 1.6 does not apply. Suppliers must instead ensure they meet the following high-level requirements, as well as all applicable regulatory and legal requirements. The customer must be made aware of how to complain, and the progress of any complaint investigation, in a way that meets the customer s particular needs. Suppliers must also communicate their decision to the customer in a clear and timely way. They must give reasons for the decision and explain any redress and/or action being taken. When deciding what channels to use, suppliers must take into account the profile of the customer, the nature and complexity of the matter being complained about and any other relevant factors e.g. the previous Page 5 of 9

6 2. Decision communication method used by the customer. Assessing the merits of the complaint 2.1: Suppliers will investigate complaints competently, diligently and impartially and they will be decided upon promptly. There must be a clear focus on ensuring a fair customer outcome is achieved. Supplier s investigations must be appropriate, proportionate to the event being complained about and documented to provide an audit trail of relevant and appropriate evidence to show a fair outcome for the customer has been achieved. Throughout their consideration of a complaint, Suppliers must remain objective, keep an open mind and focus on the customer outcome, taking into account factors and circumstances relevant at the time the event being complained about occurred, including; The relevant law, regulatory requirements and guidance; Customer s perception of events; Customer s circumstances including any vulnerabilities, the nature of their relationship with the supplier (e.g., a retail customer or professional client); and Evidence available. 2.2: Suppliers must take account of relevant guidance published by the Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS) or equivalent, including ombudsman decisions on similar complaints. When considering the weight given to any item of evidence, Suppliers must have regard to any Ombudsman decision and/or any guidance, which is relevant to the type of complaint under consideration, and in particular, the relevant weight the ombudsman has given to particular classes of evidence. 2.3: Finely balanced complaints If, after consideration of all the evidence available, Suppliers are unable to decide whether the complaint should be upheld or rejected Suppliers must uphold the complaint. 2.4: Documenting the decision rationale The complaint decision and rationale must be clearly documented in the form of a reasoned argument detailing why each complaint point is upheld or declined. Where relevant this must include reference to the credibility of the complaint and customer/supplier recollections. Each argument should be supported by reference to the available evidence. 3. Redress The solution Where the complaint is upheld in the customer s favour, the overriding principle is to put the customer back into the position they would have been in, if the original problem which led to the complaint had not happened. Where a complaint is rejected but the Supplier chooses to resolve the complaint by making a payment, the Supplier must ensure this fairly reflects the circumstances of the case. The types of complaints received will vary greatly, which means the solution offered should be designed to reflect the circumstances of the customer detriment. It is important that systems and processes are able to reflect properly the outcome of Final Version 12 June 2017 Page 6 of 9

7 the complaint so Supplier records can demonstrate why their offer of redress is appropriate. To comply with regulatory reporting requirements, and to enable complaints information to be consistently reported across all complaint types and all areas, all complaint redress payments must be recorded under, or be capable of being mapped to, one or a combination of the following payment categories: Compensation; Refund of premiums, fees and charges taken in error; Payment without admission of liability; and Costs borne internally by the supplier as part of putting customers back in the position they would have been in, had the event being complained about not occurred. These are in addition to any payments made to the customer but are only where the cost actually crystallises and becomes identifiable on an internal Profit and Loss account. The complaint offer letter must clearly explain the basis of and period for the redress calculation. Suppliers must not refer to payments without admission of liability as an 'ex-gratia' payment or a 'gesture of goodwill' in communications with customers and/or their representatives as these terms are not customer friendly and might create a perception that a full investigation has not taken place. 4. Root cause analysis Learning from complaints Suppliers must record all complaints fully and accurately to enable identification and recording of the underlying causes of complaints, including behaviours which lead to inappropriate customer outcomes. Suppliers must analyse complaint root cause information and use this analysis to identify opportunities to improve customer products and services, thereby reducing the incidence of complaints. 4.1 Procedures Suppliers must set out and document their process to investigate the root cause of complaints and must detail: Procedures to be used to assess the impact to the customer base, including the non-complainants; Steps to be taken once the root cause has been identified, including: o Prioritisation; o Developing and approving action plan(s); o Escalation routes, including where it is recommended not to take any action; o Communication/feedback loops; o Sign-off; and o Record-keeping requirements. If the Supplier is performing any of the above activity on behalf of the Group, further guidance must be obtained from the Supplier s Relationship Manager or contact point within the Group. 5. Training and competence Page 7 of 9

8 Suppliers must equip staff with the skills and knowledge necessary to enable them to meet the Group s objective of delivering the right outcome for customers first time. Suppliers must ensure staff are fully competent to handle, oversee or outcome test complaints they deal with. They must also maintain adequate records to demonstrate the competency of staff. Training and competence records must be sufficient to evidence the training given to support colleagues in achieving competence and the ongoing assessment of competence. The nature of the colleague's role will determine the amount of evidence needed to meet this requirement. 6. Performance and reward The performance management framework in place for staff handling complaints must be set in accordance with the principles and requirements of the Group Complaint Handling Policy and Procedures. The performance and reward framework must not drive inappropriate contractor behaviours. The performance and reward framework must also operate in accordance with the Group Remuneration policy for third parties. Staff remuneration for complaint handling and related activities must not be linked to productivity. Any complaint handling targets must be realistic, achievable and subject to ongoing review. Measurement against any such targets must involve the use of judgement. This means taking account of all relevant circumstances such as complaint complexity and volume of evidence. The Supplier must operate the following controls: KEY CONTROLS FOR SUPPLIERS Control Title Control Description Frequency Training & Competence All relevant staff who have complaint handling responsibilities receive appropriate training to have the skills and knowledge necessary. Training must take place as a minimum annually. Training is appropriately validated/ evidenced. Supplier Governance The Supplier must ensure that arrangements are in place to monitor regularly the continued adequacy and effectiveness of processes, systems and controls in order to assess compliance with this Complaint Handling Policy. Management Information Effective Complaint Handling processes Key Management information, as agreed with the Supplier Relationship Manager or contact point within the Group, is submitted to them and is accurate, timely and approved for submission. The Supplier must have a quality control framework in place to ensure that: All complaints are recorded promptly and accurately. The merits of complaints are assessed and investigated consistently, diligently and As required Final Version 12 June 2017 Page 8 of 9

9 impartially in accordance with the Decision procedures. Complaints are decided upon promptly with a clear focus on delivery of a fair outcome for the customer in accordance with the Decision procedures. Where a complaint is upheld in the customer s favour the customer is placed back into the correct position in accordance with the Redress procedures. Customers are made aware of how to make a complaint, are kept informed on the progress of a complaint, and are advised of the outcome of investigations in accordance with the Communication procedures. Record Keeping Root Cause Analysis Effective Complaint Handling processes The Supplier must retain records (electronic and paper, and including training records) to evidence compliance with this document. The Supplier must carry out regular reviews to identify, understand, and mitigate material risks and customer treatment impacts. The Supplier must put in place action plans and act upon these to resolve any issues identified. MANDATORY REQUIREMENTS NON-COMPLIANCE Any material differences between the requirements set out above and the supplier s own controls should be raised with the Accountable Executive for the relationship by the Supplier with Lloyds Banking Group s Supplier Manager. The Supplier Manager will then discuss the non-compliance with the Accountable Executive for the relationship and BUCF to agree way forward. Version Number Effective Date March October November September August 2017 Next Planned Revision: July 2018 Page 9 of 9