The Missing Piece with Consumer Complaints

By Michael Dunn, CMB

Just a few short years ago, complaints from consumers primarily came in through angry phone calls or lawsuits.  Now they can come in through a seemingly ever-increasing array of sources: emails, regulatory agencies, social media messages, internet ratings sites, website contact-us screens, etc.  The Consumer Financial Protection Bureau (CFPB) has stated in the CRM Examination Procedures that it examines lenders to determine whether or not an institution has made a “deliberate, good faith effort toward resolution of each consumer complaint.” The CFPB is telling the industry that, as part of their review of an institution’s larger Compliance Management System (CMS), they are concerned with how an institution addresses individual complaints and not necessarily about the merits of those complaints.  CFPB examiners also take complaint patterns and trends for complaints into account as a way to hone in on certain apparent weaknesses within an organization. Examiners expect financial institutions to be proactive about tracking complaint trends within their organization as well.

Assuming the organization has a solidly documented complaint resolution process, the missing piece for many financial institutions is the next step:  the drill-down on what went wrong during the process. Institutions can find themselves so engulfed with untangling messes and putting out one fire after the next that they fail to properly diagnose what caused the complaint to occur. Financial institutions should ask themselves the following questions in the evaluation process:

  • Are there comparable complaints that  might indicate a trend?
  • What resolution was applied to this complaint?
  • Who is tracking and how are these trends communicated back to Compliance for correction?

These are important steps that don’t just go away because the lender made the consumer happy with a “Sorry for your Inconvenience” gift card to Starbucks. Putting good faith efforts into resolving a consumer’s complaint may alleviate their animosity towards the institution, but the complaint itself is likely still publicly available for future consumers reading pleasure. Evaluating past complaints can be a proactive step to ensuring less complaints occur in the future.

The follow through is what separates complaint resolution processes from being good to being excellent. Every compliance officer wants his or her compliance department to be excellent, not just average.  We believe that dedicated systems that allow this type of complaint tracking are the most efficient way for a compliance department to turn the negative of a complaint into a positive: to provide the organization with insight into trends, holes in the system, weaknesses in sales, process improvement, etc. is extremely valuable information. 

Documenting the corrective action process not only prevents future mishaps, but also shows examiners that a financial institution is self-policing, that the CMS is working as it is supposed to, and that the organization is dedicated to serving consumers. The CFPB expects you to know it, track it, and follow through on it. Happy tracking!