Musings from the CU Suite

Written by Anthony Demangone

The FTC recently released its annual report on consumer complaints.  The FTC press release will get most of the attention.  It lists the dreaded "top 10" consumer complaints of 2012.

 

From this, you can get a general feeling of what bothers American's consumers.

But if you dig further, this report can yield so much more.  A ton more. 

The report breaks down complaints by state.  For example, here's what the report tells us about Alabama.

Alabama

Adjusted for population differences, Alabama consumers ranked 30th in terms of the number of complaints about fraud and other miscellaneous categories. But Alabama ranks 10th in complaints about identity theft.  (Data from p. 15.)

There's a specific page of the report that details all the complaints in Alabama. On that page, you'll see that Alabama consumers, setting aside identity theft, focused 20 percent of their complaints at debt collectors, banks and lenders. 

If you are a financial institution in Alabama, why not brief your board on the national statistics, along with Alabama-specific data?  You can then explain how your credit union manages risks in those areas. 

And such an analysis could easily be done for every state where you have operations.

Just an idea.

But here's where it gets interesting.

Where are these complaints coming from?  This page from the report provides the details. I was a bit shocked to see that, outside of the FTC, here are the top 5 sources of complaints to the FTC database.

1. The Better Business Bureau.
2. The Internet Crime Complaint Center.
3. Privacy Star
4. The CFPB
5. America's state law enforcement agencies

This got me thinking.

• My guess is that the CFPB will be pushing in more complaints in the future.  A lot more.   That should push up the number and percentage of complaints about financial institutions.
• The BBB was the largest contributor?  Yep.  And the report lists which Better Business Bureau offices pushed complaints to the CFPB.  What is your relationship with the BBB?  Have you reached out to the BBB office closest to your headquarters?
• Who is your credit union's complaint Czar?  Who is tracking this report, the CFPB's complaint process, and NCUA's complaint process?  

We live in an age of complaints.  The age of the consumer.  With that in mind, I highly recommend that we all pay attention to these types of reports.  Doing so will help you manage compliance and reputation risks.  

But better yet, doing so will put you in the shoes of consumers.  And the more we do that, the better.

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If you liked this, you might also be interested in:

• Ours is a risky business.  This Musings post is a good primer on risk management. 
• Reputation.   This NAFCU Compliance Blog posts focuses on reputation risk.
• NAFCU's Board of Directors and Supervisory Committee Conference, where I’ll cover essential information on BSA and risk management. NAFCU’s Regulatory Compliance School and Seminar are the industry’s leading conferences for CU staff with concentrated compliance responsibilities.  NAFCU strives to help our industry's compliance officers view compliance holistically.  Can you do it?  How must you do it?  And how will it affect our reputation risk? Good compliance officers address all three questions.