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5 Things to Consider Now That 7,700+ Consumer Complaints are Public

5 Things to Consider Now That 7,700+ Consumer Complaints are Public

Posted by Trey Sullivan on Jul 16, 2015 9:00:00 AM
Trey Sullivan
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The CFPB’s publication of more than 7,700 consumer complaints last month highlighted the need for a strong complaint management system. Here are 5 things to consider.

cfpb_mazeOn June 25, the CFPB publically published more than 7,700 consumer complaints, according to a recent press release. These complaints cover issues related to mortgage, credit cards, bank accounts, debt collection and more. Approximately 59 percent of those filing a complaint online opt to make it public, according to the CFPB blog.

When the CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), one of their primary responsibilities was managing these consumer complaints

From the CFPB’s perspective, the publication of these complaints is in line with its stated goal of giving consumers a stronger voice in the financial marketplace.

However, some industry experts have expressed concerns about the public database.

“We don’t verify all the facts alleged in these complaints, but we take steps to confirm a commercial relationship,” the CFPB notes in the disclaimer. This in particular led some organizations to question the ability of these complaints to accurately reflect the marketplace. In addition, some have said that the database may not provide enough context for consumers to use the narrative information effectively.

Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), called it “simply a public shaming of banks,” in a recent statement.

 

5 Considerations for Improving Complaint Management

Despite concerns, for now, the public database is here to stay. It’s time to take a close look at your consumer complaint management policies and processes. Here are 5 things to consider as you look to improve your complaint management process.

1. What are potential sources of complaints, i.e. verbal complaints, written complaints, regulatory submissions, and social media?

The CFPB narrative database is just one outlet through which consumers can submit complaints. Companies may also receive complaints on social media, through the institution’s website, written and mailed, by phone call or even by submission to another regulatory agency. Managing the CFPB complaints is just one aspect of a larger program, so consider how each channel is monitored and how complaints are managed.

The 2013 CFPB Supervisory Highlights said that institutions should establish “channels through which the entity can receive consumer complaints and inquiries. Such channels may include telephone numbers or email addresses dedicated to receiving consumer complaints or inquiries.”

2. How does the financial institution investigate the validity of complaints?

How does the institution evaluate the accuracy of the complaints, and how does it determine how and when to respond or resolve the complaint? A quick look through the complaint database shows that every complaint is different. That presents a unique challenge to financial institutions.

3. Are there clear roles and responsibilities for monitoring, collecting, reviewing and resolving complaints?

teamworkEach institution will have a different process for managing complaints, but all need to have clear roles and responsibilities in place. Whether it’s a person or a team, having clear roles and responsibilities will help the complaint management be as efficient and effective as possible.

In addition to the human resources, consider how complaints are recorded and maintained. Patterns in the complaints may indicate that additional program and policy review is needed.

4. What is the timeline for responding to complaints?

For the CFPB’s public database, financial institutions have 15 calendar days after receiving the complaint to respond, according to the website. The complaint will go live after the company responds, or those 15 days are up, whichever comes first.

The FDIC says that "an institution should be prepared to handle consumer complaints promptly. Procedures should be established for addressing complaints, and individuals or departments responsible for handling them should be designated and known to all institution personnel to expedite responses."

5. How are complaints reported to management, and who owns that process?

Management should be kept aware of the complaints. When reviewing the reporting to management, consider whether the frequency, reason or nature of the complaints, issue owner and issue resolution are included in the reports.

TRUPOINT Viewpoint: A culture of service is not enough to effectively manage complaints. Proactive complaint management becomes even more important with the implementation of the public complaint database. Review the complaint management process at your institution to ensure that it is robust enough to provide real assistance to consumers, satisfy regulatory requirements, and even protect your institution.

This CFPB process seems to get financial institutions focused on a granular, one-by-one strategy, versus resolving issues by product or complaint type. Keep an eye toward the big picture - addressing the CFPB database is only one element of a complaint strategy that should include the bank’s complaint policy, procedure, complaint log, survey of social mediums, BBB and employee training, as well as regulator (state or national) responses.

While the CFPB is making a lot of noise about complaints, remember that other regulators, like the Federal Reserve and the FDIC, are also soliciting complaints.

An effective complaint management system can provide real, actionable insights into consumer experiences and how to improve the financial institution.

Still have questions about the CFPB complaint database? Get answers to 7 FAQs:

Free eBrief: 7 FAQs about the CFPB's Complaint Database

 

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Topics: Ncomply, Lending Compliance, Product Insight, Compliance, Mortgage Lenders, CFPB

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