How to Handle FCA Customer Complaints in a Dealership — A Practical Guide
- Jan 12
- 4 min read
Updated: 5 days ago
Handling customer complaints isn’t just about keeping customers happy — under Financial Conduct Authority (FCA) rules, it’s a regulatory obligation. For UK motor dealers involved in consumer credit, general insurance, or both, poor complaint handling can quickly escalate into FCA scrutiny, remediation costs, and reputational damage.
This guide explains how FCA complaint handling works in practice, what dealers must do, and how to build a compliant, defensible complaints process that protects both customers and your business.
Why FCA Complaint Handling Matters for Motor Dealers
The FCA expects firms to handle complaints fairly, promptly, and consistently, with the customer’s outcome at the centre of the process. Under DISP (Dispute Resolution) rules and Consumer Duty, complaint handling is now a key indicator of whether a dealership is delivering good customer outcomes.
Common triggers for FCA concern include:
Delayed responses to complaints
Poor complaint records or MI
Failure to identify vulnerable customers
Inconsistent outcomes across sites
Repeated complaints about finance or insurance sales
In short: complaints are no longer an admin issue — they are a regulatory risk signal.
What Is an FCA Complaint?
FCA Definition of a Complaint
Under FCA rules, a complaint is:
Any expression of dissatisfaction, whether oral or written, justified or not, about the provision of — or failure to provide — a financial service.
This means:
Complaints do not need to be in writing
A casual comment to a salesperson can still be a complaint
The customer does not need to use the word “complaint”
FCA Complaint Handling Process for Dealerships
1. Identifying FCA-Regulated Complaints
Not all complaints fall under FCA rules. Dealers must distinguish between:
FCA-regulated complaints (finance, insurance, affordability, disclosures)
Non-regulated complaints (vehicle quality, servicing issues)
Staff must be trained to recognise when FCA rules apply — misclassification is a common audit failure.
2. Acknowledging the Complaint
Dealers must:
Acknowledge the complaint promptly
Confirm understanding of the issue
Explain next steps clearly and simply
Good practice is to acknowledge within 2–3 business days, even if the investigation is ongoing.
3. Investigating the Complaint Fairly
FCA expectations include:
Reviewing all relevant documentation (finance proposal, demands & needs, disclosures)
Considering whether the customer is vulnerable
Assessing whether the outcome was fair, not just “technically compliant”
This is where documented customer journeys and audit trails are critical.
4. Issuing the Final Response (Within 8 Weeks)
Under FCA rules:
Dealers have 8 weeks to issue a final response
The response must clearly explain the decision
If unresolved, customers must be informed of their right to go to the Financial Ombudsman Service
Missing the 8-week deadline is a breach, even if the complaint is later resolved.
Common FCA Complaint Failures in Dealerships
Dealers often fall short in the same areas:
❌ No central complaint log
❌ Inconsistent handling across sites
❌ Poor evidence of decision-making
❌ No root cause analysis
❌ Complaints are not fed into training or sales improvements
These weaknesses are routinely highlighted during FCA AR reviews and audits.
FCA Consumer Duty and Complaints
Under Consumer Duty, complaints are no longer isolated events — they are evidence.
The FCA expects dealers to:
Analyse complaint trends
Identify systemic issues
Make changes to prevent repeat harm
Demonstrate learning and improvement
If complaints reveal poor outcomes, the FCA expects action — not excuses.
How ComplianceTrak Supports FCA Complaint Handling
ComplianceTrak helps dealers move from reactive complaint handling to a controlled, auditable process.
Key support includes:
Centralised complaint tracking
Clear FCA vs non-FCA complaint classification
Evidence-based investigation workflows
Vulnerable customer identification via InsightTrak
MI dashboards for AR principals and senior management
Audit-ready complaint records
This ensures complaints are handled consistently, fairly, and in line with FCA expectations.
Best Practice Tips for Dealerships
Train all frontline staff to recognise complaints
Keep complaint language simple and customer-focused
Always assess vulnerability
Link complaints to training and quality assurance
Treat complaints as insight — not inconvenience
Final Thoughts
FCA complaint handling isn’t about ticking boxes. It’s about protecting customers, protecting your permissions, and proving good outcomes.
Dealers who invest in clear processes, strong MI, and the right systems don’t just stay compliant — they build trust, reduce risk, and strengthen their FCA relationship.
ComplianceTrak supports UK motor dealers with clear, consistent, and FCA-compliant complaint handling. Get in touch to see how we can help you strengthen your processes and evidence fair customer outcomes.
Frequently Asked Questions About FCA Customer Complaints
What counts as an FCA customer complaint?
An FCA customer complaint is any expression of dissatisfaction — written or verbal — about a regulated financial activity such as motor finance or insurance. The customer does not need to use the word complaint for FCA rules to apply.
Do verbal complaints need to be recorded under FCA rules?
Yes. FCA rules require both verbal and written complaints to be identified, logged, and handled consistently. A complaint made in person or over the phone must be treated the same as one received by email or letter.
How long does a dealership have to respond to an FCA complaint?
Under FCA DISP rules, a dealership has up to 8 weeks to issue a final response. If the complaint is not resolved within that timeframe, the customer must be informed of their right to refer the matter to the Financial Ombudsman Service.
Do all customer complaints fall under FCA regulation?
No. Only complaints relating to regulated activities — such as consumer credit or general insurance — fall under FCA rules. Complaints about vehicle quality or servicing are usually non-regulated, but staff must be trained to correctly identify FCA customer complaints.
What happens if a dealership misses the 8-week FCA deadline?
Missing the 8-week deadline is considered a breach of FCA rules, even if the complaint is later resolved. This can lead to regulatory scrutiny, adverse audit findings, and increased oversight from your Appointed Representative principal.
How does Consumer Duty affect FCA complaint handling?
Under Consumer Duty, complaints are treated as evidence of customer outcomes. The FCA expects dealerships to analyse complaint trends, identify root causes, and make changes to prevent repeat harm — not simply resolve complaints individually.
Do vulnerable customers require special consideration when handling complaints?
Yes. FCA rules require firms to identify and support vulnerable customers throughout the complaint process. This may include adjusting communication methods, allowing extra time, or providing additional support to ensure fair outcomes.
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