For brokers operating under FCA authorisation, complaints handling isn’t an optional extra bolted onto customer service, it’s a core regulatory obligation with its own rulebook, its own deadlines, and its own consequences for getting it wrong. Whether you’re a mortgage broker, a general insurance intermediary, an equity release adviser, or a claims handler, the rules under DISP (Dispute Resolution: Complaints) in the FCA Handbook apply to you, and the FCA expects you to know them inside out.
This article sets out what brokers need to understand about FCA complaints handling: what counts as a complaint, the timescales you must work to, the standards you’re held to, and how Consumer Duty has raised the bar further still.
What Actually Counts as a Complaint?
One of the most common mistakes brokers make is under-recording complaints because they don’t recognise what they’re looking at. The FCA’s definition is broad. A complaint is any oral or written expression of dissatisfaction, justified or not, from or on behalf of a person, which alleges that they have suffered, or may suffer, financial loss, material distress, or material inconvenience.
That last part matters. A complaint doesn’t need to involve money to count. A client who is frustrated because nobody called them back when promised, or who felt poorly treated during a sale, may have a valid complaint even if they haven’t lost a penny. The Financial Ombudsman Service has been explicit that distress, inconvenience, and even reputational harm can all justify a complaint being upheld.
This means a throwaway comment like “I’m not happy with how this was handled” made on a phone call should be treated with the same seriousness as a strongly worded letter. If your staff aren’t trained to spot these moments, complaints will go unrecorded and that creates a much bigger problem than the original issue ever was.
Who Can Complain?
The complaints handling rules apply to “eligible complainants.” For most brokers, this covers consumers, but it also extends further than many firms realise. It includes micro-enterprises (businesses with fewer than 10 employees and turnover or balance sheet under €2 million), charities with annual income below £6.5 million, and trustees of trusts with a net asset value below £5 million. If you deal with small commercial clients, don’t assume they fall outside the regime simply because they’re a business rather than an individual. Those that meet certain criteria can be deemed eligible.
The Timescales Brokers Must Work To
Getting the timeline right is one of the most scrutinised parts of complaints handling, and it’s where firms most often slip up.
- Three business days for informal resolution. If you can resolve a complaint to the customer’s satisfaction by close of business on the third working day after receipt, you can send a Summary Resolution Communication instead of running the full formal process. This letter must still be in writing, must confirm the complaint is resolved, and critically must tell the complainant they can refer the matter to the Financial Ombudsman Service if they later change their mind. Many firms forget this last point and lose the benefit of the informal route as a result.
- Eight weeks for a final response. Where a complaint isn’t resolved informally, firms generally have eight weeks from receipt to issue a final response. This must say clearly whether the complaint is upheld, partially upheld, or rejected, explain the reasoning, and set out any redress offered. If you can’t meet the eight-week deadline, you must write to the complainant explaining why, giving an indication of when you expect to conclude, and informing them of their right to go to the Financial Ombudsman Service without waiting for your final response.
Fair, Consistent, and Prompt — Not Just Fast
The FCA’s language is deliberate: complaints must be handled fairly, consistently, and promptly. Speed alone isn’t the goal. A complaint resolved quickly but unfairly will simply resurface at the Ombudsman, with the added reputational and regulatory cost of having got it wrong the first time.
This is where Treating Customers Fairly (TCF) principles and, more recently, the Consumer Duty come in. Consumer Duty requires firms to focus on actual customer outcomes, not just whether a process was technically followed. When investigating a complaint, brokers should be asking not just “did we follow our procedure?” but “did this customer receive a good outcome, and would we be comfortable explaining our decision to the regulator?” Complaints handling has effectively become a live test of how well Consumer Duty is embedded in a firm’s culture, not just its paperwork.
Recording and Reporting
Every complaint must be logged, regardless of how quickly it was resolved including those dealt with informally within three days. Firms must keep records that allow them to demonstrate, if challenged, exactly what happened, when, and why. Beyond individual case records, firms are also required to report complaints data to the FCA, typically twice a year, broken down by category.
This reporting obligation exists for a reason that goes beyond box-ticking: the FCA uses this data to spot patterns. A firm with a low complaints volume but a high uphold rate, or a cluster of complaints around one product or process, can attract supervisory attention quickly. Brokers should treat complaints data as an early warning system for their own business, not just a regulatory chore. Recurring or systemic issues identified through complaints should trigger a root-cause review, not just a case-by-case fix.
Why This Matters Beyond Compliance
Poor complaints handling doesn’t just risk regulatory censure. Every complaint that escalates to the Financial Ombudsman Service carries a case fee for the firm, win or lose in terms of process, and an adverse Ombudsman decision can be far more costly and more damaging to reputation than resolving the issue properly in-house at the outset. A robust, well-understood complaints process is therefore as much a commercial safeguard as a regulatory one.
For brokers, the practical priorities are clear: train every member of staff to recognise a complaint when they hear one, build a process that meets the DISP timescales without exception, document everything, and judge outcomes against Consumer Duty as well as procedure. Getting this right protects your customers, your FCA relationship, and your business.
If you’d like support putting a compliant handling framework in place including policies, template letters, and the records the FCA expects to see, our documents and templates are built specifically for brokers navigating these requirements.
This article is for informational purposes only and does not constitute legal or compliance advice. Brokers should consult their compliance function or a qualified regulatory adviser for guidance specific to their business.
Written by the Ecompli founder — With over 20 years in financial services and having founded Ecompli in 2006, these blogs are written by a specialist with hands-on expertise in FCA regulation across the mortgage, general insurance, equity release, and insurance claims handling sectors.
