The difference between managing complaints and resolving them well

Effective complaint resolution means going beyond process completion. In regulated complaint handling, resolution quality must always stand up to the FCA and Financial Ombudsman Service (FOS) reviews. This means resolving cases fairly, timely, and with documented evidence.

This guide focuses on the difference between process compliance and true complaint resolution quality. It provides practical insights and best practices for regulated firms to improve outcomes, reduce escalation risk, and build customer trust.

Most firms can manage a complaint. Far fewer resolve complaints consistently well enough to satisfy customers and pass regulatory, FOS, and audit reviews.

You already know how to log and track a complaint. What’s harder, and more important, is drawing the line between following the process and actually resolving the complaint in a way that feels fair, complete, and defensible.

In regulated industries, complaints can’t be just a service issue with goodwill thrown in for good measure.

Complaints are difficult because they’re often emotional. Customers aren’t always calm when they raise one. There is usually frustration, disappointment, or anxiety involved, especially where money, services, or reputations are at stake.

Behavioural research consistently shows that when people feel wronged, they seek validation before they’re in the mindset to accept a resolution. They want to feel heard, understood and treated fairly.

Good complaint handling isn’t just about process. It’s a confidence-building resolution.

We’ve been the ones trying to resolve complaints well when case volumes are high, inboxes are full, and the whole team is under pressure to make sound decisions quickly and consistently. Here are some best practices that helped us.

Respond fast because silence escalates the complaint

Delay is one of the fastest ways to damage trust. Even where there’s no formal breach of timelines, silence feels like neglect to the customer and often triggers escalation behaviour.

What good looks like:

• Clear acknowledgement within hours, not days

• Realistic expectations set early

• Named ownership from the start

• Regular updates, even when there is no material change

A complaint that sits untouched for days because someone is waiting on input from another party is a common failure point. The customer sees inactivity. Internally, people assume someone else is handling it. Escalation risk rises before the investigation even begins.

A fast response is not about rushing decisions. It is about signalling control and momentum.

The power of a simple apology

Historically, firms were cautious about apologising, fearing it could be interpreted as an admission of liability. This position has shifted.

Section 2 of the Compensation Act 2006 is clear that an apology or offer of redress does not in itself constitute an admission of negligence or breach of statutory duty.

A well-delivered apology reduces emotional temperature and increases perceived fairness.

What good looks like:

• Acknowledging the impact on the customer

• Expressing sincere regret without scripted language

• Avoiding defensive phrasing

• Separating empathy from liability

A thoughtful apology can stabilise a complaint early and prevent positional conflict later. A poor or formulaic apology can do the opposite.

For a deeper look at apology practice and outcomes, read Why apologising to customers matters in complaint handling.

Investigate complaints promptly and transparently

Investigating a complaint well means more than starting quickly. It means structured ownership, visible progress, and an evidence trail that supports the final decision.

Most customers don’t expect instant answers, but they do expect visible momentum and clear communication.

What good looks like:

• Clear case ownership from day one

• Defined investigation stages and target timeframes

• Proactive evidence gathering

• Regular customer updates

• A documented rationale for decisions

Where investigations stall, escalation risk rises. Not always because the outcome is wrong, but because confidence in the process collapses and customers feel undervalued.

Common failure patterns include:

• Doing the investigation work but not recording it properly

• Holding key reasoning in personal notes, chats, or inboxes

• Failing to document phone conversations and verbal evidence

• Issuing final responses without clearly showing the reasoning.

In regulated environments, reasoning without evidence often falls short and increases the likelihood of escalation being upheld. Speed without structure increases risk. Structure with visibility improves speed and decision quality.

One of the biggest customer frustrations is feeling undervalued. They’ve had to chase for updates, then after weeks of waiting they’re told in a perfunctory way that their complaint hasn’t been upheld. It feels like a slap in the face.

Communicate clearly and consistently throughout

To a customer, radio silence isn’t neutral. It’s a strong negative. Lack of updates is one of the most common drivers of repeat contact and escalation.

Communication discipline reduces operational noise and customer frustration.

What good looks like:

• Pre-agreed expectations

• Promised dates met or proactively reset

• Clear next-step explanations

• A consistent point of contact

• Case stakeholders aligned on the same facts

• One primary customer communication channel wherever possible

Strong communication reduces inbound chasing, duplicate work, and misalignment between stakeholders.

After closure, high-performing teams go one step further:

• Send a short satisfaction check on clarity and fairness

• Follow up on upheld complaints after one to two weeks to confirm stability

This signals that resolution isn’t just seen as an administrative closure but outcome ownership.

Document and evidence every key decision

In regulated complaint handling, doing the right thing is only half the requirement. You must also be able to evidence how and why you did it.

FCA and FOS reviewers look for clear decision logic, not just decision outcomes.

What good looks like:

• Clear written reasoning in plain language, stating what investigation was done, what evidence was considered, and how the decision was reached

• A full audit trail of actions and timestamps

• Supporting evidence stored centrally and linked to the case

• Demonstrable fair treatment of the customer in the given circumstance

A recent Financial Ombudsman Service decision shows how weak communication can affect outcomes. In case DRN-5142323, the insurer did the right thing when it realised it had offered a poor service, but then failed to clearly explain its liability decision. The ombudsman found this caused avoidable distress and upheld the complaint in part. Source: FOS decision DRN-5142323Publicly available FOS decisions frequently highlight reasoning and communication weaknesses as key drivers of partial or full uphold outcomes.

Good documentation also enables pattern detection and insight into how robust the process is. Tools such as Fishbone diagrams and 5 Whys can support root cause analysis. See Use the Fishbone diagram and 5 Whys to strengthen complaint handling.

Good complaint handling protects revenue and reduces churn

Complaint handling is often labelled a cost centre. In practice, it’s where revenue leakage, regulatory risk, and customer retention are either controlled or compounded.

Complaint outcomes influence customer retention, brand reputation, escalation cost, redress exposure, FCA supervisory confidence, and operational workload.

What good looks like:

• Fewer Ombudsman referrals

• Lower repeat complaint volumes

• Faster fair resolutions

• Reduced rework and redress leakage

• Stronger customer retention

Poor complaint handling carries measurable cost:

• Increased churn

• Negative reviews and reputation drag

• Higher escalation fees and compensation

• Staff fatigue and turnover

Handled well, complaints can increase loyalty and trust. Handled poorly, they multiply cost and risk.

For a structured improvement model, see The 5 Cs of complaint handling: a practical framework for better outcomes.

Why complaint management systems make better resolutions possible

Resolution quality isn’t just about team effort or intent. It’s heavily influenced by structure and tooling.

Many teams still rely on spreadsheets, shared inboxes, or general CRM systems that aren’t designed for regulated complaint workflows. These create fragmentation, hidden work, and inconsistent evidence capture.

A purpose-built complaint case management system for regulated firms supports resolution quality by design.

What a complaint case management system provides:

• Structured workflows aligned to FCA expectations

• Built-in ownership and escalation controls

• SLA timers and alerting

• Centralised evidence and audit trails

• Consistent decision recording

• Reporting and root-cause insight

With the right system in place, teams typically see faster and more consistent decisions, lower escalation rates, better MI and oversight, reduced manual coordination work, and improved team confidence.

Complyr is built specifically for regulated complaint teams, with configurable workflows and actions, audit-ready records, and integrated oversight controls. It supports resolution quality, not just case tracking.

The bottom line

Managing a complaint means moving it through a process. Resolving a complaint well means delivering a fair, timely, well-evidenced outcome that stands up when tested.

Resolution quality is what protects customers, satisfies the FCA and the Ombudsman, and reduces commercial risk.

Teams cannot deliver this consistently with fragmented tools and improvised processes. They need structure, visibility, and evidence built into the workflow.

If your goal is fewer escalations, stronger outcomes, and higher-confidence decisions, your complaint handling system must support resolution quality from start to finish.

See how structured complaint resolution works in practice. Book a Complyr free trial or demo.

Frequently asked questions

Can a complaint be handled correctly but still resolved badly?

Yes. A complaint can follow the correct process and still result in a poor resolution. It may meet required steps and timelines. However, if the decision is poorly explained, weakly evidenced, or feels unfair, it can be overturned or only partially upheld. Regulators and the FOS assess outcome quality and reasoning. They do not look only at whether process steps were completed.

What is a partially upheld decision by the FOS?

A partially upheld decision means the FOS found that the firm did some things correctly but also made errors. Those errors caused avoidable distress or inconvenience to the customer. The FOS may therefore award a distress and inconvenience (D&I)payment as compensation. This can happen even if the FOS agrees with the firm’s core decision on the complaint itself.

What is a distress and inconvenience payment in a partially upheld complaint?

A distress and inconvenience (D&I) payment is compensation awarded by the FOS where a firm’s handling of the complaint caused avoidable upset, inconvenience, or additional effort for the customer. This can be awarded even if the FOS agrees with the firm’s core decision on the complaint issue. It reflects the impact of the handling, not just the outcome.

What makes a complaint outcome defensible under FOS review?

A defensible complaint outcome under FOS review is supported by a clear timeline, recorded evidence, documented decision logic, and a plain-language explanation of how the conclusion was reached. If an independent reviewer can follow the reasoning and see the evidence, the decision in the final outcome is more likely to be upheld. Structured complaint management systems make this easier by ensuring actions, evidence, and decision rationale are captured consistently throughout the case lifecycle.

Why do complaint decisions get overturned by the FOS?

Complaint decisions are often overturned by the FOS because the firm cannot show how it reached the conclusion, did not gather or retain key evidence, failed to explain its reasoning clearly, or caused avoidable inconvenience or distress to the customer. In many cases, the issue isn’t the decision itself but the lack of documented justification behind it.

Is meeting complaint deadlines enough to show good complaint handling?

No. Meeting deadlines isn’t enough to show good complaint handling. It demonstrates expected timeliness but this doesn’t necessarily equal resolution quality. Good complaint handling also requires fair reasoning, consistent decision-making, and complete documentation. A fast response without proper investigation or evidence can still lead to escalation.

What is resolution quality in regulated complaint handling?

Resolution quality in regulated complaint handling means the complaint is concluded with a fair, well-reasoned, and well-evidenced outcome that is clearly explained to the customer. It focuses on decision strength and transparency, not just process completion or closure speed.

How do you show that a complaint decision was fair?

You show that a decision was fair by recording the facts considered, the evidence reviewed, the rules or standards applied, and the reasoning behind the final decision. The case record should make it clear why the outcome was reached and how the customer's individual circumstances were taken into account.