Use Consumer Complaints To Do Your Job!

Too many bankers look at consumer complaints as a nuisance. They resent having to do the research on a complaint or respond to a consumer. This attitude is often the result of dealing with customers who complain.

I've had the dubious pleasure (admittedly many jobs ago) of responding to consumer complaints to the agency. While some complaints had merit, such as the foreign service officer whose practice of making payments early before being shipped overseas resulted in the institution's failure to properly credit his payments, many complaints were from frustrated customers who had caused their own problem.

Handling customer complaints is not easy. In fact, it is "burn-out" work. Most of the people you talk or correspond with have problems and the problems are often of their own making. It becomes easy, too easy, to reject these complaints and the customers who make them. It becomes easy to treat them simply as a nuisance.

It is important to remember that there is more benefit to handling consumer complaints than simply complying with the regulatory mandates to respond. Consumer complaints are more than simply complaints. Consumers complain about something they want, something they want enough to sit down and write a letter. When a customer wants something that much, you should consider what it is telling you about needed products or services. Complaints can be a front line for market research.

Congress listens to these consumer wants. Most compliance legislation has its roots in consumer complaints. When the creditor didn't listen, the consumers went to Congressmen who did listen. That's how CRA got started.

In the early and mid-70s, consumers complained that they were unable to get conventional mortgages on inner city neighborhoods, even though people wanted to buy houses there. Lenders often cut off demand by first asking callers where their property was located and then saying they only loaned in the suburbs. This practice wasn't looked upon with favor in Congress. We now have CRA, HMDA, and stepped up fair lending enforcement.

Other compliance legislation comes from similar roots. Disclosure laws are based in situations that pitted consumers against creditors. When consumers and creditors face off, consumers usually win. After all, how can anyone reasonably say that a consumer doesn't have a right to know what the credit will cost or what return there will be on a deposit.

And the really big one: When can I have my money? Perhaps nothing financial institutions did generated more complaints and consumer hostility than placing lengthy holds on customer deposits. The almost automatic result was complaints to congressmen. As with loan and deposit disclosures, this type of issue sells well. It is almost un-American to oppose letting consumers have quick access to their own money. Congressman use these issues effectively when campaigning for another term. Consumer protection issues fall nicely into the "Look what I've done for you lately" category.

Consumers and their complaints are here to stay. Banks have their heads in the sand if they fail to use complaints to their advantage. Respond to complaints. Keep your customers happy and keep your customers. But don't simply resolve complaints and set them aside. Consider complaints as a source of information. Use them as marketing research. Customers who complain are not simply being a nuisance, they are telling you what they want. Get your bank ahead of the curve and design a product or service to respond to that customer desire.

This brings us full circle back to CRA. Using and responding to complaints by creating a response to customer need in the form of a product or service should support your CRA program. This type of response can make the difference between a "Satisfactory" and an "Outstanding" bank.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 8, 5/96