complaint management - uba conference/hamilton... · complaint management ... differentiate from...

1Compliance Services© 2016 Temenos USA. All rights reserved.

Complaint Management

Leah M. Hamilton, Chief Compliance Officer

2Compliance Services

What you will learn

Complaint management

Regulator expectations

Origin of complaints

What is a complaint

Complaint Management Program

Risk impact


Complaint resolution is the basic

principle for maintaining customer

relationships

Resolve issues early; uncover and

manage shortcomings

Identify potential disconnects between

customer perception and bank

perception

Discover compliance weaknesses in a

function or department of institution

Differentiate from the competition

Customer can be advocate for

institution when addressed properly



Regulator expectations

CFPB’s active solicitation for complaints

Consumer complaints a primary focus

Designates collection, investigation and response to

consumer complaints as on its 6 primary functions

Foundational component of its duties

All regulator expectations

4th pillar of CMS

Robust policies, procedures, controls

Streamlined and collaborative

Centralized for enterprise-wide data capture


Origin of complaints

Various channels Mail

Email

In-Person

Through Regulators Prudential banking regulators, State Attorney General, state licensing

authorities, CFPB’s Consumer Response Program, Federal Trade Commission

Through a service provider, third party vendors

Social media Facebook, Twitter, Instagram

Institution website

A direct dispute regarding information in a consumer report

An indirect dispute through a consumer reporting agency Via e-OSCAR System regarding information in a consumer report


What is a Complaint

No ‘legal’ definition

Merriam-Webster An expression of grief, pain, or dissatisfaction; something that is the cause or

subject of protest or outcry; a formal allegation against a party

CFPB definition 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 CFPB’s Consumer Response Annual Report (January 1 – December 31, 2012, p. 4, footnote 1)

You define in your institution’s policy A verbal or written statement from a customer or non-customer that

expresses dissatisfaction with any of the institution’s products, services, policies, or fees; or a claim of being misled, deceived, or treated unfairly


Examples of complaints

Consumer states that he or she wishes to file a complaint

Consumer states an institution’s practice or employee interaction was misleading

Allegation of discrimination

Criticism of institution’s CRA performance

Consumer threatens to file suit against institution

Alleges institution violated a specific law or regulation or questions about legality of a policy or procedure

Complaint letters sent by an attorney on behalf of a customer

All complaints received from the institution’s regulatory agency or any government agency


What is not a Complaint

Define what is not a Complaint in your policy

Disputes resolved according to a dispute resolution process that

already in place (ATM, MasterCard, Credit Bureau, billing errors,

etc.)

No second complaint

Address corrections/changes

Account inquiries or requests for assistance (balancing their

checking account)

Request(s) for refund of fee(s)

ANY of the above if normal procedures do not satisfy the

customer’s concern


Distinguish inquiry vs. complaint

Inquiry vs. Complaint

Determine the types of inquiries to track based on the potential

risk to the institution

Advisable to track, trend and report negative trends as a complaint

“When did you start charging for____?”

“When did the ________fee go up?”

Okay to

document

Compliments,

too!


Compliance

Regulatory citations, fines,

reduced ratings

Scrutiny

Operational

Legal

Litigation

Reputation

Financial

Risks for not managing complaints

As with any business,

identifying and assessing risk is

a critical component to ensure

compliance

Complaint management is an

essential function of

compliance management


Pulling it all together

Risk assessment

Written policies and procedures

Root cause analysis

Monitoring and tracking of complaints and issue escalation

Testing

Internal communications and

training

Publication of the consumer complaint

management program to the public

Partnering with consumer advocacy

groups and regulators

Centralized

complaint

management



Risk Assessment

Identify and assess risk areas

High risk regulations

Fair lending

High risk customers

Elderly, servicemembers,

Regulator hot buttons

Fair Debt Collections Practices Act (FDCPA)

Always include UDAP/UDAAP

Commensurate with size, complexity, appetite for risk, etc.

http://www.affirmx.com/wp-content/uploads/2012/09/Complaint-Management-Risk.png

http://www.affirmx.com/wp-content/uploads/2012/09/Complaint-Management-Risk.png



Polices and procedures

Establish and maintain policies, processes and procedures

Comprehensive, detailed Identify complaints

Identify origin of complaints

How/where to record complaints

Categorize complaints

How to process and investigate complaints

Who, what, when and how to respond to complaints

Identify course of remedial action, including escalation

Specifies record retention requirements

Incorporates complaint monitoring and/or audit



Your Institution

Technology vs. paper



Root cause analysis

Require minimum amount of data to be collected

Through data capture, able to: Identify root cause(s)

Unique to this customer

Systemic failure

Monitoring and tracking

Identify trends Complaint type/category

Product/service

Branch, department

Geographical region

Early warning signs

Leverage data proactively to avoid systemic issues

Quality control

Incorporate public database information CFPB, BBB, social media



Testing

Compliance testing High-risk issues

Issues subject to public and/or regulatory scrutiny

Fair lending, UD(A)AP, financial exploitation of the elderly, servicemembers, students

Data breaches

Fraud

Analytics Ensure testing includes resolution and corrective actions

Identify weaknesses in controls Re-examine risk assessment as appropriate



Internal communications

No hoarding of data allowed … share it!

Board and senior management support Customer-centric culture of awareness and understanding

Proactive and responsive

Customer ‘Bill of Rights’

Report data results Board, senior management

Staff

Vendors

Training, training, training

Create real-life examples reference



Public

Make policy and process visible to the public

Ensure easy access

Manages reputational risk

Builds customer relationships

Partner

Consider teaming with

Consumer advocacy groups

Regulators

Avoid issues vs. adversarial approach


Pulling it all together

Risk assessment

Written policies and procedures

Root cause analysis

Monitoring and tracking of complaints and issue escalation

Testing

Internal communications and

training

Publication of the consumer complaint

management program to the public

Partnering with consumer advocacy

groups and regulators

Centralized

complaint

management


One last consideration …

Complaints drive … regulatory change!

complaint management - uba conference/hamilton... · complaint management ... differentiate from...

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