Steps for Responding to Consumer Complaints

QUESTION

In our recent CFPB exam, the examiners noted that we did not have a policy and procedure in place for consumer complaints that took the CFPB's Company Portal into consideration. I know the policy is supposed to provide the procedures, step by step, for handling consumer complaints that originate through the portal. Our compliance attorney asked us to contact you, as she said you provide such policy documents for consumer complaints. So, what are the steps that we should be following when we receive a complaint through the CFPB’s complaint portal?

ANSWER

In the readiness review that we do in anticipation of the examination conducted by the Consumer Financial Protection Bureau (CFPB), one of the important policies to always review is the one relating to consumer complaints. Keep in mind that the CFPB considers the appropriate handling of consumer complaints a foundational pillar of the Compliance Management System.

The policy for handling consumer complaints that are issued via the “Company Portal” (so dubbed by the CFPB) is very extensive and involved. The lender should be particularly careful to include all the elements of the complaint mandates, which, in the case of the CFPB’s requirements, are specifically set forth in its Company Portal Manual. [See Company Portal Manual, Version 3.0, April 2017]

Response time and process flow are critical aspects of the compliance requirements vis-à-vis consumer complaints. The CFPB’s Office of Consumer Response answers consumers’ questions and sends consumers’ complaints directly to financial companies. It expects to work with companies in such a way as to get the consumer a response, generally within 15 days. The CFPB will consider responses to be past due for complaints that have exceeded the 15-day limit by which a company must provide an “in progress” status or the 60-day time limit by which a company must provide a final response to a consumer complaint.

The Consumer Response process requires the following nine steps:

1. Consumer submits a complaint about a consumer financial product or service by web, telephone, mail, fax, email, or another agency refers the complaint to the CFPB. Consumers who submit complaints directly to the CFPB’s website can opt to have their complaint narrative published in the Consumer Complaint Database.
2. Consumer Response screens the complaint for completeness and sends it to the company identified by the consumer via the secure portal for a response or refers it to the appropriate regulator.
3. Company reviews the complaint, communicates with the consumer as appropriate, and determines what action to take in response.
4. Company responds to the consumer and the CFPB via the portal.
5. OPTIONAL: Company selects from a structured list of public company response categories.
6. CFPB invites the consumer to review the company’s response by logging into the secure Consumer Portal or calling the CFPB’s toll-free number.
7. Consumers are given the opportunity to provide feedback to the CFPB about the complaint process.
8. Complaints are published in the Consumer Complaint Database when the company responds to the complaint confirming a commercial relationship with the consumer, or after the company has had the complaint for 15 days, whichever comes first. With consumers’ consent, scrubbed complaint narratives will be published when the company selects an optional public response or after the company has had the complaint for 60 calendar days, whichever comes first. Complaints can be removed if they do not meet all of the publication criteria.
9. Complaint data and information is shared with other offices within the CFPB, including, but not limited to, Enforcement and Supervision, as necessary.

Jonathan Foxx

Managing Director

Lenders Compliance Group