Aipedia: Debt advice firms

AI in debt advice complaints handling

Aipedia, by the Apex broking team · Last reviewed 2026-10-30

Debt advice firms can use AI to triage and draft complaint responses, but CONC 8.2.3G reminds them that DISP requires complainants to be treated fairly. Complaints are also where PI notification duties are often triggered.

Part of: AI in Debt advice firms

In short

Complaints about debt advice can come from customers, their representatives or creditors. AI helps firms sort complaints, summarise case files and draft final responses, while complainants and representatives use AI to write complaints and Ombudsman submissions. CONC 8.2.3G says debt advice firms have DISP obligations to treat complainants fairly. The Financial Ombudsman Service has reported AI-assisted submissions with multiple inaccuracies and wants clearer rules on AI records and human escalation. A complaint that alleges loss may also be a circumstance to notify under a PI policy.

How AI is used on both sides of a complaint

Inside the firm, AI tools are used to:

classify incoming complaints and identify root causes;
summarise call recordings, letters and case notes for the handler;
draft final responses and redress calculations;
spot trends that may need a wider review.

On the other side, customers and their representatives may use AI to write complaints. In its response to the Mills Review in April 2026, the Financial Ombudsman Service said that in a small early sample AI likely contributed to up to 35% of responses to initial assessments, and that professional representatives had filed AI-assisted submissions of around 200 pages with multiple inaccuracies against a provisional decision of 6 to 8 pages. It asked the FCA for clarity on AI record keeping, human escalation and AI-to-AI disputes.

The duties that apply

DISP. CONC 8.2.3G reminds debt advice firms that they have obligations under the Dispute Resolution: Complaints sourcebook to treat complainants fairly. An AI-drafted response is still the firm's response and must engage with what the customer actually raised.

Consumer Duty. Under the Consumer Duty, complaints data is a key source of evidence on outcomes, and root causes should be addressed. The FCA's good-practice page expects auditable records of how AI is used.

Records. CONC 8.3.15G and SYSC 9.1.1R require orderly records. The complaint file should show what the handler considered, not just what the tool produced.

What can go wrong

Illustrative scenario: a customer complains that a plan was unaffordable and mentions, near the end of a long letter, that they told the adviser about a serious illness. The AI summary focuses on the budget figures and omits the illness. The draft response rejects the complaint on affordability grounds and the handler sends it. The Ombudsman later finds the firm failed to consider the vulnerability point, and the case becomes harder to defend.

Other common failure points include:

summaries that miss key allegations or vulnerability;
generic responses that do not address the customer's points;
AI-written complaints with inaccurate facts or references, which still need a fair answer;
root causes not escalated because each complaint is handled in isolation;
a potential claim not notified to the insurer in time.

Using complaints to find AI problems

Complaints are often the first sign that an AI tool is misbehaving. A cluster of complaints about unaffordable plans may point to the budgeting tool; complaints that warnings were never given may point to letter drafting or transcription. Tag complaints by the tools involved in the case, review them together and feed findings back to whoever owns each tool. Where a pattern suggests other customers were affected who have not complained, the Consumer Duty may require the firm to look further.

How PI usually responds

Complaint handling costs on their own are often outside PI unless a claim is made, depending on the wording. Ombudsman awards may be treated as claims under some wordings. The key point is notification: a complaint alleging loss, or a pattern of complaints from one tool or process, may be a circumstance that must be notified within the policy's time limits. Late notification can affect cover. See circumstance notification, the Ombudsman and PI and does PI cover AI errors in debt advice.

Practical controls

Have the handler read the original complaint, not only the AI summary.
Check every AI-drafted response addresses each point raised.
Verify facts and references in AI-written complaints against your own records, then respond fairly.
Track complaints linked to AI tools and escalate patterns.
Build a PI notification check into the complaint workflow.
Use call records carefully; see AI call transcription and quality checks.
Compare the claims sector's experience in AI-written complaints to the Ombudsman.

How Apex helps

Apex arranges PI for debt advice firms and can explain what your policy requires you to notify and when. See the AI in debt advice hub.

Sources

Frequently asked

Can we use AI to draft final responses to complaints?

Yes, but CONC 8.2.3G reminds debt firms of their DISP duty to treat complainants fairly. A handler should read the complaint, check the draft addresses every point and take responsibility for the response.

How should we treat an AI-written complaint?

On its merits. The Ombudsman has reported AI-assisted submissions with inaccuracies, so check facts against your records, but still give a fair answer to the substance. Do not dismiss a complaint because AI helped write it.

Should we tell the customer that AI helped with our response?

There is no specific DISP rule requiring it, but transparency supports trust and the FCA expects auditable records of AI use. What matters most is that a named handler has considered the complaint and stands behind the response.

When does a complaint need to be notified to our PI insurer?

It depends on the policy, but a complaint alleging loss, or a pattern pointing to a wider problem, is often a circumstance that should be notified within set time limits. Check your wording and ask your broker if unsure.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.