As humans, we tend to assign greater significance to our negative experiences than to our positive experiences. That’s right—it’s not just you. Social psychologists such as Roy Baumeister, as well as human resources educators such as Robert Sutton, have produced research and articles that confirm this phenomenon. Simply put: bad memories outweigh good ones.
One can see the dynamic between bad and good throughout the world of compliance, but especially in regards to consumer complaints. Did you know that, for the average consumer, it takes 12 positive experiences to make up for one unresolved negative experience? It’s little wonder 91% of unhappy consumers report that they will not willingly do business with the offending company after a negative interaction with that company.
When every complaint received means another 26 consumers are silently deciding to avoid your business, no organization can afford to ignore a single piece of feedback. That means your finance company has two options: A) make sure there’s nothing to complain about to begin with, or B) optimize your consumer complaint management program to address feedback promptly, thoroughly, and completely.
Any finance company that’s been in business for more than a couple weeks knows Option A is unrealistic, so let’s focus on Option B. Luckily, we have a model to start with—the Consumer Financial Protection Bureau has issued guidance on effective complaint management programs for finance companies, breaking those programs into 5 key areas. Let’s start with your program’s intake and escalation processes. Use the checklist below to make sure you have your business covered:
Consumer Complaint Checklist
CFPB Guidance on Consumer Complaint Intake
The CFPB’s objectives: consumer complaints and inquiries—regardless of where or how they’re submitted—are appropriately recorded and categorized.
Compliance Questions to Ask
- Do you have a process for receiving complaints submitted…
- by email?
- by phone?
- by mail?
- from the CFPB?
- Have you developed common categories for these complaints to fall into?
- Is each interaction date and time stamped for in-depth analysis later?
CFPB Guidance on Consumer Complaint Escalation
The CFPB objectives: Organization appropriately escalate complaints that raise legal issues involving potential consumer harm from unfair treatment, discrimination, or other regulatory compliance issues
Compliance Questions to Ask
- Have you developed business rules for escalating complaints?
- Are your escalation rules documented and repeatable?
- Are complaints routed to the appropriate person automatically based on these rules?
- Can you see where a complaint is within the escalation process at any point in time?
How did you do? The greater the number of “yes” responses you gave, the better shape your program is in. Hang on to your answers because, in a few weeks, you’ll get the chance to compare and discuss your complaint management program at an upcoming webinar about what the CFPB is looking for in terms of consumer complaint response.