Achieving good customer outcomes when handling claims

While no retailer (or finance provider, for that matter) wants to receive a customer complaint, it’s important to ensure you have an effective complaint handling process in place for when one does arise.

Read our guide to get a comprehensive overview of the Section 75 claims and complaints process, and how we can work together to ensure your customers get the best experience.

Understanding the difference between a Section 75 claim and a complaint

You may refer to claims and complaints interchangeably, but there are key differences between the two:

• Section 75 claim: If the customer is dissatisfied with your goods or services (provided the value of the item is between £100 and £30,000), they may be able to make a claim to Novuna under Section 75 of the Consumer Credit Act 1974 (“Section 75”). Claims can be brought under Section 75 for breach of contract and/or misrepresentation. The customer may wish to receive a repair, replacement, refund or other resolution.
• Regulated complaint: This involves complaints relating to a customer’s finance agreement directly. They may wish to complain about the way finance was sold or administered, for example.

Less often, customers sometimes also bring claims under Section 140A of the Consumer Credit Act 1974, whereby they claim that the relationship between them and Novuna is unfair. Whilst this article doesn’t cover these claims, we will of course work closely with you to resolve claims of this nature.

It’s important to note that a claim can become a complaint. If a customer is unhappy with the handling of a Section 75 claim, they may then make a complaint about the handling of the claim. Where at all possible we encourage retailers to work with us to resolve a claim before it gets to this point.

Some Section 75 claims may be brought to us by way of a formal Letter of Claim under the “Civil Procedure Rules”. This article doesn’t cover these.

There are certain complaints we are not able to get involved with, such as complaints related to the service provided by the retailer (i.e. staff behaviour) or complaints about non-regulated agreements. If we receive a complaint that is solely your responsibility as a retailer, we will refer the customer’s complaint to you in writing. We will also write to the customer to confirm their complaint has been referred to you, along with your details.

Working with our retailers to handle claims and complaints

A finance provider like Novuna Consumer Finance shares equal responsibility with the retailer for some claims pursuant to Section 75. Customers are able to make a claim for breach of contract and/or misrepresentation to both you as the retailer and ourselves as their finance provider about the goods and services bought using finance.

That’s why we’ll work closely with you to deal with any such customer issues quickly and efficiently, and get to a fair resolution.

Remember that our goal is to get the right outcome. This means we play an impartial role in the process, working with both sides to facilitate an open and transparent conversation.

Handling a Section 75 claim

Firstly, we’ll help to validate the claim by assessing the relevant information provided by the customer. This allows us to gain a comprehensive understanding of the situation and why the customer is not satisfied with the goods or services provided by our retail partner.

We will then work closely with all parties to try and find a resolution. Of course, we appreciate it can be frustrating to receive a complaint. But it should never be a matter of arguing over who is ‘right’ or ‘wrong’. It’s about delivering outstanding service at every touch point. If a customer is dissatisfied, we need to work together to find out why and do all we reasonably can to turn things around.

It’s important to keep the lines of communication open at every stage. Always respond to customer communication, however tempting it may be to simply ignore the problem.

Once a resolution has been found we will write to the customer to detail the situation and then close the claim.

What happens if a resolution is not found in a timely manner?

We align our claims process and timescales to the Financial Conduct Authority’s complaint handling guidelines. So, if after 56 days the claim has not been resolved satisfactorily, we will advise the customer of their right to complain.

We make every effort to ensure retailers engage proactively in the complaints process.

The deadlines for responding to customer complaints

Regulated complaints, which usually relate more directly to the finance agreement itself, must be managed according to specific timescales. Often, a customer will make a regulated complaint directly to us. However, if a customer does come to you with a regulated complaint that we are responsible for, ask them to communicate with us and our team will then investigate as soon as possible.

We will always endeavour to investigate and resolve the complaint quickly. If we’re able to resolve a complaint within 3 working days, we will send the customer a letter advising them that the complaint has now been closed. If it cannot be resolved within 3 working days, complaints will be acknowledged in writing within 5 working days. Our team will regularly update the customer on the progress of the complaint investigation.

If we are still unable to reach a resolution after 8 weeks (56 days), we will write to the customer with an update and advise them of their right to refer their complaint to the FOS.

We will of course continue working towards finding a suitable resolution and, once we do, we will send a final response letter informing the customer of the outcome.

Escalating a complaint to the FOS

A customer has the right to refer their complaint to the FOS if they are still unhappy with the handling or resolution of their complaint eight weeks after first raising it. They must contact the FOS either by writing, by telephone or via email within six months of the date of our final response letter.

The FOS will then make a decision on the outcome. They could require us to do a number of things, such as telling us to provide a full or partial refund for the customer, requiring us to arrange a repair or replacement item, or suggest that no further action should be taken. We’d then work closely with you to ensure that the outstanding issues are dealt with promptly.

Do also be aware that there is a fee for every complaint referred to the FOS, regardless of outcome. It’s therefore almost always preferable to resolve a customer claim or complaint within that initial eight-week period.

What you should expect from your retail finance provider

As we mentioned earlier, as your retail finance provider we share liability in certain circumstances for customer purchases. So, we are not only happy to help you resolve customer issues, it’s often a requirement for us to do so.

The focus of our complaints team is to facilitate communication between you and your customers to make sure the complaints process runs smoothly. While our in-house legal team are on-hand to share their expertise and guidance with our complaints specialists, if you require legal advice you will need to consult your own legal team or a law firm.

Our complaints experts can support with:

• Reviewing a claim to ensure customers are dealt with in the right way
• Developing a complaints procedure and policy
• Creating a complaints process flow to help you manage complaints
• How to structure communications about complaints, including a response letter, summary resolution letter and a final response letter

How to respond to customer complaints

Firstly, don’t take complaints personally. All businesses will experience issues from time to time. But, once a customer has raised a complaint, the best thing you can do is deal with it swiftly and professionally.

• Make it straightforward for your customers to find out about your complaints process, perhaps via a page on your website or your complaints policy.
• Respond empathetically to all customer complaints. It can be hard to take, particularly if you think there isn’t an issue, but it’s important to always deal with customer complaints calmly and politely.
• View complaints as feedback. You can use customer complaints to identify areas of your business that can be improved, so make sure to genuinely listen to their problems.
• Keep the lines of communication open. There’s nothing worse – or more damaging to a customer relationship – than radio silence. Even if you have no updates, keep in regular contact with customers so they know you’re still investigating their complaint.
• Resolve all complaints as quickly as you can. Even if you don’t think your customer is right, taking their feedback onboard could protect your reputation and turn a negative experience into a positive one for that customer.
• Record and track all complaints to help you identify trends or ongoing issues going forward.

Supporting you when things go wrong

As your retail finance provider, we’ll be by your side when things go right and when things go wrong. Our retail partners are assigned a dedicated Relationship Manager to assist with day-to-day enquiries, but we also have a specialist complaints handling team here to support. They’ll work closely with you to handle all mutual claims and complaints to ensure we reach the right outcome for your customers.

Find out more about working with Novuna here.