Handling Customer Complaints

Several distinct legal frameworks govern how UK businesses must handle consumer complaints.

ADR Regulations 2015

The Alternative Dispute Resolution for Consumer Disputes (Amendments) Regulations 2015 implement the EU ADR Directive and were retained in UK law after Brexit. They impose two clear obligations on all businesses selling goods or services to UK consumers:

• You must include information about at least one approved ADR scheme in your terms and conditions or customer-facing service documentation
• When you cannot resolve a complaint internally and the dispute has reached deadlock, you must send the customer a deadlock letter that identifies the relevant ADR scheme, provides its website address, and states clearly whether you agree to use it

You are not required to participate in ADR — only to signpost it — unless your sector makes participation compulsory (see below). Failure to comply is enforced by Trading Standards, which has civil enforcement powers under the Consumer Rights Act 2015.

FCA-Regulated Firms: DISP

If your business is authorised by the Financial Conduct Authority, you must comply with the FCA's Dispute Resolution sourcebook (DISP). This requires:

• A written, documented complaints handling procedure
• Acknowledgement of complaints in writing within five business days
• Resolution or a final response letter within eight weeks, explaining the outcome and the customer's right to refer to the Financial Ombudsman Service
• Annual complaints data returns to the FCA and publication of a summary on your website

Non-compliance with DISP can result in FCA enforcement action, including public censure, financial penalties, and suspension of regulatory permissions.

Consumer Rights Act 2015

Independently of your complaints procedure, the Consumer Rights Act 2015 sets non-excludable minimum standards that apply to all consumer contracts. Goods must be of satisfactory quality, fit for purpose, and as described. Services must be provided with reasonable care and skill, within a reasonable time, and at a reasonable price where not agreed in advance. Any term in your complaints policy purporting to exclude these rights is unenforceable.

A formal written complaints procedure is legally required for FCA-regulated firms and strongly advisable for all other businesses. At a minimum, your procedure should address the following elements.

How to complain: State clearly on your website, in your terms and conditions, and on invoices how a complaint should be made (by email, in writing, or by phone), to whom it should be addressed, and what information the customer should provide. A named complaints handler or designated complaints role lends credibility and ensures accountability.

Acknowledgement within three business days: For regulated firms the FCA requires acknowledgement within five business days, but three days is better practice and sets a positive tone. Confirm in writing the name of the person handling the complaint, your reference number, and a realistic estimate of when a substantive response will follow.

Investigation: Review all relevant documentation, speak to the staff members involved, and gather the facts before formulating your response. A defensive response issued before you have understood the complaint is usually counter-productive and can make an escalation more likely.

Written response: Issue a clear written response explaining what happened, your view of the facts, whether the complaint is upheld (in full or in part), what remedy you are offering (refund, replacement, apology, gesture of goodwill), and what the customer should do if they remain dissatisfied.

Escalation path and ADR signposting: Your response must tell the customer about ADR options. If the complaint has reached deadlock — you have issued a final response and the customer remains dissatisfied — send a deadlock letter identifying the relevant ADR scheme. For regulated sectors, you must also state the customer's right to refer to the relevant ombudsman.

Record-keeping obligations: Maintain a complaints log (see the section on timelines and record-keeping below). FCA-regulated firms must retain complaint records and correspondence for specified minimum periods and make them available to the FCA on request.

In several sectors, membership of an approved ombudsman scheme is mandatory — customers can refer complaints after exhausting your internal process and the ombudsman can issue rulings that are legally binding on your business if the customer accepts them.

• Financial services — Financial Ombudsman Service (FOS): All FCA-authorised firms must be members. Consumers can refer complaints after eight weeks or on receiving a final response letter, whichever is earlier. The FOS can award compensation up to £430,000 for complaints referred from 1 April 2024. Its decisions, if accepted by the consumer, are legally binding on the firm. The FOS also covers some businesses not directly FCA-regulated, including appointed representatives.
• Energy suppliers — Energy Ombudsman: All domestic and micro-business energy suppliers must be members of the Energy Ombudsman scheme. Customers can refer complaints after eight weeks or on receipt of a deadlock letter from the supplier. The Energy Ombudsman can award compensation and require the supplier to take specified corrective action.
• Telecoms providers — CISAS or Ombudsman Services: Communications: All providers regulated by Ofcom must be members of either CISAS (Communications and Internet Services Adjudication Scheme) or Ombudsman Services: Communications. These are the two Ofcom-approved ADR schemes. The referral threshold is eight weeks or a deadlock letter.
• Legal services — Legal Ombudsman: Solicitors regulated by the SRA must signpost clients to the Legal Ombudsman. Clients have six years from the date of the act or omission, or three years from when they should reasonably have known about it, to make a referral. Barristers, licensed conveyancers, and other legal service providers regulated under the Legal Services Act are also within the Legal Ombudsman's jurisdiction.
• Property and estate agents — Property Ombudsman or Property Redress Scheme: All estate agents in England must belong to an approved redress scheme — either the Property Ombudsman or the Property Redress Scheme. This has been mandatory since 2014 and extends to letting agents. Letting agents in England must also belong to a client money protection scheme.
• Healthcare — Care Quality Commission (CQC): CQC-registered providers (hospitals, care homes, GP practices, dental practices, and others) must have a formal complaints procedure meeting the requirements of the Health and Social Care Act 2008 (Regulated Activities) Regulations. NHS complaints follow a separate two-stage process via the provider and then the Parliamentary and Health Service Ombudsman.

If you are unsure whether mandatory ombudsman membership applies to your sector, check with your industry trade body or the relevant regulator before you start trading.

The eight-week rule is the central benchmark for consumer complaints across regulated UK sectors. For FCA-regulated firms and Ofgem-regulated energy suppliers, it is the maximum period before a final response letter must be issued — after which the customer can refer to the relevant ombudsman regardless of whether you have concluded your investigation.

Even for unregulated businesses, failing to respond substantively to a complaint within eight weeks is likely to be considered unreasonable by a court, ombudsman, or ADR adjudicator. Courts taking into account pre-action conduct in civil proceedings (under the Pre-Action Protocols) expect businesses to respond promptly to complaints and disputes.

Final response letters for FCA-regulated firms must include: a clear statement of the firm's position, whether the complaint is upheld or not, any offer of redress, and confirmation that the customer may refer the matter to the FOS within six months of the final response letter.

Deadlock letters for all consumer-facing businesses should confirm that your internal process is exhausted, identify the relevant ADR scheme, provide its contact details and website, and state whether you agree to participate.

You should maintain a complaints log that records for each complaint: the date received and the channel; a description of the complaint; the name of the handler; all correspondence dates; the outcome; any remedy offered and whether accepted; and whether the customer escalated.

Retention periods: FCA-regulated firms must retain complaints records for a minimum of three years (five years for MiFID business). For all other businesses, retain records for at least six years — the standard limitation period for contract claims in England and Wales under the Limitation Act 1980. This ensures records are available if a complaint later becomes a court claim.

Under UK GDPR, personal data in complaints correspondence must be handled with a lawful basis and not retained longer than necessary. Review your retention policy periodically and securely delete records that are no longer needed. The ICO's guidance treats six years as a reasonable retention period for resolved complaints, matching the limitation period.