PerformLine Report Reveals Risks Associated With Company Responses to Consumer Complaints in CFPB Database

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New analysis reveals vulnerabilities for companies based on how they respond to consumer complaints.

PerformLine Report: Risk Signals from the CFPB’s Consumer Complaint Database

PerformLine Report: Risk Signals from the CFPB’s Consumer Complaint Database

"Omni-channel compliance monitoring and risk management programs are crucial for today’s consumer finance and FinTech companies."

PerformLine, the leading RegTech company delivering automated compliance solutions, today publicly announced the findings from their second annual analysis of the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database. The report, which analyzes trends and risk signals from the database, was generated in an effort to help companies in the financial services industry better understand their compliance issues and the possible implications of regulatory violations and infringements. The analysis reveals vulnerabilities for companies based on how they respond to consumer complaints.

A key finding of the report shows that when companies failed to respond to 100+ consumer complaints in a timely manner (i.e. within 15 days), there was a 41% probability of being the subject of a CFPB enforcement action. Also of note, of the top 10 companies with ”Untimely Responses” to complaints, half of them were the target of a CFPB enforcement action.

Increased regulatory scrutiny of marketing practices that mislead or deceive consumers—and lead to many consumer complaints—has been on the rise by federal agencies. The mission of the CFPB is to protect consumers from unfair or abusive practices and take action against companies that break the law.

“This report highlights the synergies between high levels of consumer complaints about a company and the likelihood of CFPB action against that company,” said Alex Baydin, CEO of PerformLine. “We felt it was crucial to bring these findings to light so that companies can rethink their approach to complaints and how they monitor their interactions with consumers for compliance across their marketing, advertising and contact center channels. Omni-channel compliance monitoring and risk management programs are crucial for today’s consumer finance and FinTech companies."

The CFPB Consumer Complaint Database was launched in 2012 to provide consumers a place to submit complaints about issues with financial products or services and receive help with getting responses from companies.

Key findings of the report include:

● Untimely Company Responses to Complaints Increase Risk: Of the 10 companies with the highest number of untimely responses to complaints, half of them were the target of a CFPB enforcement action.

● Penalties Are Harsh: For companies with over 100 “untimely” responses to complaints, 41% of them were fined, and the average fine was $534 million.

● Thresholds Matter: If the CFPB has received over 2,000 consumer complaints about a company, the probability of that company being fined jumps to 50%, and to 58% with 10K+ complaints (from 6% probability in the 100-2,000 consumer complaint range). Companies need to be aware of where they reside on this scale and be prepared with a risk mitigation plan.

● Complaints Are Highest in Certain Industries: Of those industries analyzed, mortgage, debt collection and credit reporting were considered to be at the highest risk for action by the CFPB.

To download a copy of the report, Risk Signals from the CFPB’s Consumer Complaint Database, visit http://lp.performline.com/cfpb-risk-signal-report

PerformLine will be at Booth#1440 during Money20/20 in Las Vegas from October 23-26, where they will be handing out copies of the report and providing free demos of their automated compliance monitoring platform used by top brands in lending, banking, mortgage, FinTech, payments, and credit cards looking for the most comprehensive marketing oversight platform available. Meetings can be scheduled during Money20/20 by emailing sales[at]performline.com.

About PerformLine
PerformLine is the leading RegTech company delivering automated compliance solutions for enterprises looking to mitigate regulatory risk and ensure brand safety. Its cloud-based platform empowers compliance functions with the intelligence, insights and tools needed to mitigate risk across all consumer interactions channels including web, voice, chat and mobile. PerformLine saves clients money by automating compliance activities across channels and departments, creating significant cost-savings. For more information about PerformLine, visit performline.com, email sales(at)performline(dot)com or follow on twitter @PerformLine.

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Claire Milazzo
PerformLine
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