Complaints handling is both a regulatory obligation and a critical indicator of the firm's relationship with its customers. For payment institutions and EMIs, effective complaints handling is not just about resolving individual disputes — it is about identifying systemic issues, improving products and services, and demonstrating to the FCA that the firm is delivering good customer outcomes. This article provides a practical guide to FCA complaints handling requirements for payment firms.
DISP Rules for Payment Firms
The FCA's Dispute Resolution (DISP) rules set out the requirements for complaints handling by authorised firms. Payment institutions and EMIs must comply with DISP in full.
Definition of a complaint. Any expression of dissatisfaction, whether oral or written, about the firm's provision of, or failure to provide, a financial service or product. The threshold is low — firms should not apply overly narrow definitions that exclude legitimate complaints.
Acknowledgement. A written acknowledgement must be sent within 5 business days of receiving the complaint, unless a final response is provided within that period.
Response timelines. For payment-related complaints, a final response must be provided within 15 business days of receipt. This can be extended to 35 business days in exceptional circumstances, with a holding response explaining the delay. For non-payment complaints, the standard 8-week deadline applies.
Final response. The final response must address the complaint substantively, explain the firm's conclusions and any redress offered, and inform the customer of their right to refer the complaint to the Financial Ombudsman Service (FOS) if dissatisfied.
Referral to FOS. If the firm cannot resolve the complaint within the relevant timeframe, or if the customer is dissatisfied with the final response, the customer has the right to refer the matter to the FOS.
Consumer Duty Integration
The Consumer Duty elevates complaints handling from a reactive process to a proactive compliance function. Under the Duty, firms must:
Analyse complaint data for root causes. Individual complaints may indicate systemic issues with products, processes or communications. The FCA expects firms to conduct regular root cause analysis and to take corrective action where patterns emerge.
Use complaints data for outcomes monitoring. Complaint volumes, themes, resolution times and customer satisfaction indicators are key inputs for Consumer Duty outcomes monitoring. The board should receive regular reporting on complaint trends and their implications.
Ensure fair outcomes. Complaint resolution must deliver fair outcomes for customers. This includes appropriate redress, timely resolution and clear communication throughout the process.
Building an Effective Complaints Framework
- Clear complaint identification. Train all customer-facing staff to recognise and record complaints, including verbal expressions of dissatisfaction.
- Centralised complaint management. Implement a central complaint management system that tracks all complaints from receipt through resolution, with automated timeline alerts.
- Skilled investigators. Ensure complaint investigators have adequate training, authority and access to systems to investigate complaints thoroughly and fairly.
- Root cause analysis. Conduct quarterly root cause analysis of complaint themes and report findings to senior management with recommended corrective actions.
- FOS liaison. Maintain a clear process for FOS referrals, including timely response to FOS enquiries and analysis of FOS decisions for implications.
- Regulatory reporting. Ensure accurate and timely submission of complaints data to the FCA via the biannual return.
What Firms Should Do Now
- Review your complaints handling framework against DISP requirements and Consumer Duty expectations.
- Assess whether complaint identification is comprehensive — are you capturing all expressions of dissatisfaction?
- Implement root cause analysis if not already in place.
- Ensure complaint data is reported to the board as part of Consumer Duty outcomes monitoring.
- Train all staff on complaint identification and handling procedures.
Regulatory Counsel advises payment firms on complaints handling framework design, Consumer Duty integration and FCA compliance. Contact us for a free initial consultation.
Frequently Asked Questions
15 business days from receipt, extendable to 35 business days in exceptional circumstances. Non-payment complaints follow the standard 8-week timeline.
Yes — authorised firms must submit complaints data to the FCA via the biannual complaints return.
The Duty requires firms to go beyond reactive handling — analysing complaint data for root causes, using complaints for outcomes monitoring and ensuring fair resolution outcomes.
Yes — if the firm cannot resolve the complaint within the relevant timeframe or the customer is dissatisfied with the final response, the customer can refer to the FOS.