As much as we strive to provide superior service, members still complain.
When that happens, do you have a complaint management procedure in place? And do you know certain regulations dictate how you should respond to member complaints?
When members have concerns or problems, how you handle the situation can make the difference in their degree of satisfaction, or the likelihood they’ll escalate the situation and complain internally to more staff and managers.
With the proliferation of technology and social media, many consumers take that route to publicize a negative experience or problem. This makes it more critical for you to handle their complaints quickly and formally.
Compliance adds another layer. Depending on the issue, members can file a formal complaint directly to the Consumer Financial Protection Bureau (CFPB) or state supervisory authority.
No pressure, right?
If your credit union has a complaint management system in place, you’ve already won half the battle. If not, it’s easy enough to implement a system that will no doubt help with future complaints.
For starters, you’ll want to have a point person and/or complaint department. This individual will be accountable for all member complaints and will make sure you resolve them on time. Depending on your credit union’s size, you might have multiple point people in each department (i.e., lending, retail).
Your complaint management process should include a method of recording the complaint and demonstrating that you handled it properly, including time frames for resolution.
Your credit union can choose to implement a policy where only written complaints are recorded, or you may include verbal complaints as well. This is at your discretion, but be sure to inform your members of the policy.
Document your communication with members and include a date and time stamp. Your board and senior management should be reviewing this log regularly.
So where does compliance come into play? According to the CFPB’s Supervision and Examination Guide, an effective compliance management system should ensure your credit union responds responsibly to consumer complaints and inquiries.
Examiners will review consumer complaints to determine whether you’ve:
• Appropriately recorded and categorized the complaints;
• Addressed and resolved them promptly;
• Escalated appropriately any complaints that raise legal issues involving potential consumer harm from unfair treatment or discrimination, or other regulatory compliance issues;
• Adjusted business practices as appropriate based on any complaints;
• Taken action to correct the effects of the complaints or the supervised entity’s actions when appropriate; and
• Identified weaknesses in the compliance management system, based on the nature or number of substantive complaints from consumers.
Pay special attention to the third bullet point. In the compliance world, this type of complaint would fall under “unfair, deceptive, or abusive acts and practices (UDAAP),” which is a serious offense.
Examples of UDAAP complaints include anything that causes monetary loss to members, misleads them, or takes advantage of them in any way.
These complaints should have a higher priority and you should escalate them appropriately. They can result in legal claims and damages against the credit union.
Front-line staff is the first line of defense against any complaints—and the best defense is a good offense. Be accountable for your member service interactions, and be sure you understand your credit union’s current complaint management system.
Look at it not just from a member service perspective, but from the consumer protection compliance point of view.
When your credit union can handle complaints effectively, it’s a win-win for everyone involved.