Complaint Management. Leah M. Hamilton, Chief Compliance Officer. Compliance Services Temenos USA. All rights reserved.

Transcription

1 Complaint Management Leah M. Hamilton, Chief Compliance Officer Temenos USA. All rights reserved.

2 What you will learn Complaint management Regulator expectations Origin of complaints What is a complaint Complaint Management Program Risk impact 2

3 Complaint Management 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 3

4 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 4 th pillar of CMS Robust policies, procedures, controls Streamlined and collaborative Centralized for enterprise-wide data capture 4

5 Origin of complaints Various channels Mail 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 5

6 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 6

7 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 7

8 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 8

9 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! 9

10 Risks for not managing complaints Compliance Regulatory citations, fines, reduced ratings Scrutiny Operational Legal As with any business, identifying and assessing risk is a critical component to ensure compliance Complaint management is an essential function of compliance management Litigation Reputation Financial 10

11 Pulling it all together Risk assessment Partnering with consumer advocacy groups and regulators Written policies and procedures Publication of the consumer complaint management program to the public Centralized complaint management Root cause analysis Internal communications and training Monitoring and tracking of complaints and issue escalation Testing 11

12 Complaint Management Program 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. 12

13 Complaint Management Program 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 13

14 Complaint Management Your Institution Technology vs. paper 14

15 Complaint Management Program 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 15

16 Complaint Management Program 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 16

17 Complaint Management Program 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 17

18 Complaint Management Program 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 18

19 Pulling it all together Risk assessment Partnering with consumer advocacy groups and regulators Written policies and procedures Publication of the consumer complaint management program to the public Centralized complaint management Root cause analysis Internal communications and training Monitoring and tracking of complaints and issue escalation Testing 19

20 One last consideration Complaints drive regulatory change! 20

21 Questions? Temenos USA. All rights reserved.