Dealing with an unhappy consumer: Should agents offer a financial settlement?

In May, EYE ran an article about an agent who had offered to discount their fees as an attempt to resolve a complaint.

This prompted a number of queries regarding the various ways of settling a dispute being received by TPO.

http://www.propertyindustryeye.com/refunds-disappointed-sellers-have-up-to-a-year-to-complain-if-agent-lets-them-down/

All agents at some point are likely to have to deal with an unhappy consumer.

The TPO Codes of Practice set out the different stages of how a complaint should be handled, providing a blueprint for agents to develop their in-house process.

If this process is followed, complaints, whether perceived as having merit or not, stand a higher chance of resolution without referral to TPO.

Furthermore, it is often the case that in the first instance consumers simply want to be listened to and for their issues to be taken seriously.

A good in-house complaint procedure coupled with an empathetic stance and an acknowledgement of where service could have been better, can go a long way to stopping a grievance turning into a dispute.

As part of an agent’s complaint process, it may be the case that an offer of settlement is made to the consumer.

This could be in relation to acknowledged service shortcomings or simply a business decision to attempt a resolution without incurring further time or expense.

Be aware, if a consumer accepts a goodwill offer, but does not do so in full and final settlement, the consumer still retains the right to escalate the matter to TPO or pursue it elsewhere (e.g. through legal channels).

My Terms of Reference preclude a complaint being considered by TPO if a goodwill offer is accepted in full and final settlement.

However, before this can occur the agent must demonstrate that they had clearly explained to the consumer that the offer was being made in full and final settlement of the issues complained about and that the consumer agreed to those terms.

Accordingly, written evidence explaining the terms of the offer and the consumer’s response accepting that offer should always be kept on file.

If there are other terms attached to the offer, or the offer is made in relation to some but not all of the complaint issues raised, this should be clearly explained in writing to the consumer at the point the offer is made.

If TPO receives a complaint where it is not clear that an offer was made in full and final settlement of all the complaint issues, then, whatever may have been the intentions of the parties, the complaint will be taken forward.

TPO cannot assume what may have been intended and therefore cannot remove a consumer’s right to bring the complaint to my office based on that assumption.

Where discounted fees are offered and accepted in full and final settlement of a complaint, TPO will consider the matter resolved.

However, where the consumer has not confirmed acceptance of the discount in full and final settlement and/or has paid all or the balance of the fee on a ‘without prejudice’ basis, the consumer can still refer the matter to TPO within 12 months of the agent’s final viewpoint letter.

Consumers may see fee reductions as refunds, but this is not the case where fees are due in full and the goodwill offer (i.e. the discount) is made for perceived service failings.

There is no right to continue to pursue the complaint through TPO where a discount has been accepted by a consumer in full and final settlement.

Finally, as a word of warning, do not offer consumers money they are rightly entitled to as a goodwill offer.

Using monies owed to a consumer as leverage (e.g. rental income or uncontested deposit amounts) to resolve a complaint is simply not acceptable. Fortunately, TPO receives relatively few cases where this has occurred.

However, be aware that where it is discovered that an agent has attempted to ‘buy’ a resolution by making a ‘goodwill offer’ of monies that a consumer is correctly entitled to, regardless of whether this has been accepted by a consumer, my office will still take the service complaint forward.

*Katrine Sporle is Property Ombudsman at TPO

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6 Comments

  1. Thomas Flowers

    Could a discount in full and final settlement also include a clause preventing a complainant from posting a negative review or removal of any such review whether ‘verified’ or not?

    If so,  how would the TPO view that clause?

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    1. PeeBee

      Not so much a question of “could” that clause be written into a settlement agreement – more like “Why on earth can…?”. 

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    2. LettingsInsurer75

      Yes, that can be done.

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  2. LettingsInsurer75

    As an insurer dealing with a lot of professional indemnity claims for letting agents/property managers, my overwhelming advice is to make sure you always notify your PI insurers and get their approval before making any offers (even WP offers) else that may well impact on any cover you might otherwise have had. Even a WP offer can potentially prejudice the handling of any complaint.

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  3. Thomas Flowers

    I guess many complaints come from unsuccessful users who have paid for a proper ‘estate agency’ service that does not complete?

    Some complainants may be offered a refund on fees already paid whether upfront or by a loan agreement?

    So a question that TPO and others need an answer to in order to put paid to the ‘review’ battle currently taking place is:

    How many users have accepted a refund and how does this figure compare to the negative reviews posted on a certain review site?

    For fairness and transparency, I cannot recall a single case where I have discounted my sales fee as a result of a complaint.

     

     

     

     

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  4. GeorgeOrwell

    Take Unhappy Consumers outside and Tickle them until they sign an Agreement to conduct themselves in a happy manner for eternity.

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