We’ve blogged a lot recently about finance companies’ “broken windows,” AKA consumer complaints. Why? For our consumer finance customers, complaint management is an essential step for using Compli’s products. Perhaps it’s more than coincidence that “complaints” and “compliance” look and sound so alike.
Here’s what else Michael had to say:
It’s Not Just the CFPB Paying Attention to Complaints
“[I]t’s not just the CFPB who’s concerned about complaints. And frankly, it’s not just you worried about complaints from your own perspective of managing customer satisfaction. Obviously, the fewer complaints, the better. But if you are having complaints, you’re worried about what impact that’s having on your customer satisfaction. And most of the companies that I know certainly want their customers to be satisfied.”
Who else is interested in your organization’s complaint management process? Michael told us that lenders—especially non-depository institutions that depend on other sources for capital—need to bear their funding partners’ concerns in mind: “Do you have an adequate compliance management system in place, does it cover all of the elements of a compliance management system, and is it working the way that it’s supposed to be working?”
Like the CFPB, capital sources regard consumer complaints as evidence of a compliance management system’s overall health. The amount and tenor of complaints lodged against your organization indicate your ability to pay back loans, stay in business, avoid an investigation, and maintain a good reputation among consumers. Generally, the more complaints you receive now, the worse things look on the horizon.
Keep in mind that it doesn’t take much to place your organization’s standing in jeopardy. A single complaint can trigger a CFPB inquiry.
Michael told us that capital sources have a number of questions about your complaint management process:
- How are you responding to your complaints?
- Does your complaint management sufficiently mitigate your regulatory risk?
- Does it protect your image and brand?
- And, ultimately, are customers satisfied?
“Happy customers pay their bills,” said Michael, “not necessarily meaning unhappy customers don’t pay their bills but, generally, happy customers pay their bills.
“As a consumer myself, I know that if I make a complaint to an organization about something, how they respond to that complaint has a big impact on my overall view of the organization. … [I]t doesn’t necessarily mean that at the end of the day, you’re going to give the response that the customer wants. You’re going to give the response that is accurate and appropriate for the situation. But I think reasonable customers understand that to the extent that the acknowledgement and the response to their complaints, to the extent that that has been handled appropriately, whether or not it came out in their favor or with the desired outcome that they were looking for—all of that has an impact on how you are viewed by your customer, what your reputation is going to be in the industry. And all of that is important as well to your capital sources.”
The 5 Key Elements of Complaint Management
To develop an effective complaint management system, an institution must answer five questions, says Michael.
Whew! That’s probably enough information for one blog post. But we’re not done with this topic—there’s plenty more about consumer complaints to explore.
In the next installment of this series, adapted from Consumer Complaints: Your Company’s Broken Windows, Compli VP of Customer Success Wendy Miller will make the business case for consumer complaints. Check back soon to find out how addressing complaints allows you to stay ahead in an ultra-competitive lending market.
Ask Professor Joe:
Consumer Complaint Tracking in Compligo
You’re leaving money on the table when you ignore customers’ concerns and possibly attracting the watchful eye of the CFPB. Professor Joe will show you how to automate your consumer complaint response program.