April 02, 2020

Complaint Management Programs - More Important Now Than Ever - WST

Chances are that a Consumer Complaint Management Program review has become a key part of your most recent consumer compliance examination.  If you still haven't developed your program or if you have a program in place but it needs refining, there is no time like the present to start developing or enhancing your internal process for gathering, tracking, responding to and analyzing customer complaints - especially since all financial institutions are adopting new ways to interact with and provide services to their customers during these challenging times.

An effective program will define both what is and what isn't a complaint.  The CFPB defines complaints as"submissions that express dissatisfaction with or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer's personal experience with a financial product or service." That said, if employees aren't sure whether an issue is a complaint, make sure your program supports the escalating of such for investigation.

You may find it helpful to use the below framework to refine and enhance training on your institution's complaint program.

  • Identify all channels from which complaints are received, such as social media (e.g., Twitter, Face-book, Instagram, etc.), email, written letter, over the phone, or in person.
  • Assign accountability for identifying, reporting and documenting all complaints, including timelines (receipt, investigation, resolution, and customer follow-up).
  • Identify higher-risk complaint types which could potentially pose reputational,  regulatory, and/or financial risks to your institution (e.g., fair banking (ECOA & FHA), UDAAP (excessive fees, undisclosed charges, unfair advertising, etc.), consumer overdrafts, SCRA, threat of legal action, third-party complaints (regulator or Better Business Bureau), etc.).
  • Define response requirements (timeliness, departments/officers involved, written templates, delivery channel (email, hard copy, phone call, etc.))
  • Engage the Board and Senior Management in analyzing the information by providing meaningful reports of complaint volumes, categories, and trends.

The receipt of complaints can provide an early warning of operational weaknesses and ineffective internal controls.  Developing and implementing a well-documented complaint management process can mitigate regulatory, financial, and reputational risks and improve customer relationships.

More information on managing complaints can be found

Also, remember 10-D Compliance now offers audit services to assess your institution's consumer compliance program, including your complaint management program.

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