Consumer Complaint Management in the Public Eye: The CFPB Flexes Its Muscle
Yesterdays’ announcement by CFPB Director Richard Cordray that the Bureau is proposing a policy to allow consumer complaint narratives to be published to the general public should strike fear into the hearts of financial institutions all over the US. Exposing consumer complaint management practices through the eyes of the customer could have a profound effect on a bank’s reputation and provide an even more compelling reason to ramp up customer service.
The Bureau is proposing that consumers who lodge complaints with the CFPB be given the option to share their account of the incident in the CFPB’s public database. Director Cordray argues that making consumer complaint narratives public would provide context to the complaint and help consumers to see trends and make decisions.
Power in Consumer Complaints
“By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem. There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole,” said Cordray in a press release.
At the moment, consumers who submit complaints to the CFPB database complete a form with information including their name, the company they are complaining about, what happened and when it happened. A text box is provided for consumers to tell the story in their own words and they can also attach documents to back up their complaint. The CFPB sends the information to the company for a response and provides the complainant with a tracking number so that he or she can check on the status of their complaint. The new proposal would allow the customer to release the text of the explanation to the public – great for consumers, not so great for banks.
Banks, of course, will be given the opportunity to respond, also publicly, to the complaint, providing an open record of the dialogue so that consumers can decide for themselves.
Customer Service Wins
One of the more interesting benefits that the CFPB is claiming will be realized by this proposal is that this sort of public shaming will spur competition based on consumer satisfaction. “With these powerful stories readily available to the public, companies may have additional incentives to address potential shortcomings in their businesses that could have negative impacts on consumers. In the end, the narratives may encourage companies to improve the overall quality of their goods and services and more vigorously compete over good customer service, all of which has the potential to improve the functioning, transparency, and efficiency of the market,” says the press release.
With even more public scrutiny on banks’ customer complaint management practices, it’s a good time to start thinking about a software solution for complaint tracking, says Joe Gerard, i-Sight’s VP Marketing and Sales. “By implementing software to ensure complaints are captured and managed properly, banks can investigate and solve complaints before they become CFPB issues, avoiding the scrutiny that a complaint narrative published to the public could bring.”