Before I try a new restaurant or buy tickets to go see a movie, I check out the reviews. This could be a glancing observation — checking to see how many stars are by its name. It could also be an in-depth research project into product reviews and user experiences that others have reported about the product or service I’m interested in.
Amy Bailey, Director of Compliance, SWBC
The internet has made posting a positive or negative experience around virtually anything as easy as clicking thumbs up or thumbs down — and consumers are using the power of their opinions to influence the way businesses operate.
Credit unions, in particular, need to make sure that they are addressing consumer complaints in a way that honors their members and institution by implementing a comprehensive complaint management program. Having a complaint management program allows credit unions to prevent member loss, to self-identify and correct mistakes or opportunities for improvement, to address any regulatory violations that come to light, and to preemptively prevent litigation by resolving member complaints when they are made aware of them.
Consequences Of Consumer Complaints
If a member complains about your credit union, there is always the chance that their complaint could go viral, reaching thousands of viewers through social media. The reputational risk factor from failing to address a complaint quickly and effectively is larger today than at any other time in history.
Having a strategically designed and systemically implemented consumer complaint management program can help credit unions mitigate this risk through every aspect of their business operations. It is also a good way to cross-check your credit union’s compliance practices. A well-run complaint management process within the compliance program provides members with an appropriate channel for voicing complaints, and the credit union with a methodology to identify and resolve systemic issues within its operations.
Today, government regulators are actively using member complaints as a way to examine current regulations and write new ones. A solid complaint management program allows credit unions to prevent and reduce regulatory violations through self-identification and correction. In addition, complaint data can help validate a credit union's successful operations and identify risks and the need for training in others.
The Key Components Of A Complaint Management System
Your complaint management process should have seven key components:
Policies and Procedures
Handling complaints should be governed by clearly written policies and procedures, in order to provide a consistent, compliant, and non-discriminatory avenue for conflict resolution.
Clear Channels of Communication
It is important for members to be able to write reviews or submit complaints through an easily accessible channel. Credit unions may wish to establish dedicated telephone extensions or email addresses to resolve issues and receive consumer feedback.
Whenever a member lodges a complaint through any channel, the credit union should have a clearly defined system for addressing it. The process for resolving complaints should include a recorded interview or written email in which the member describes the problem, an interview with the appropriate staff members involved, and checking the complaint against current best practices, policies, and procedures, and all relevant laws and regulations.
Once the credit union has thoroughly investigated a consumer complaint, they should resolve the issue in writing and following appropriate regulatory response standards to ensure that the details of their resolution process are being properly recorded. This also allows the credit union to provide a clear and precise explanation of their actions for the member who made the complaint, and to record the date and manner of resolution.
If a consumer complaint does bring to light any discriminatory, illegal, unfair, or improper practices, the credit union must take decisive corrective action to ensure that the behavior is changed. In some cases, this may require further changes to the credit union’s current policies and procedures, employee training and monitoring, systems updates, or rewriting printed and web-based material.
Retaining and Analyzing Data
Credit unions should have and follow a system for properly logging consumer complaints. Once it has been compiled, this data is a great source of insight that will allow the credit union to recognize consumer trends, identify areas of risk, spot compliance violations, and diagnose any current weaknesses in their members’ experience with their institution.
When considering your credit union’s complaint management program, it will be important to educate your employees about how to handle consumer complaints, so that they are best able to assist your members. Institute appropriate training on these policies for any staff members who resolve complaints or may have the opportunity to receive a complaint from a member.
Complaints happen. Having a system in place for addressing members’ complaints in a timely, respectful, and proactive manner will serve to help protect a credit union’s reputation, ensure high standards of compliance, provide data for identifying systemic product or process issues, and result in greater member satisfaction.
A thorough understanding of compliance is one vital tool in your risk management tool kit. Learn about the other components of a proper risk management tool kit in our ebook. Click here to download.
Amy Bailey is Director of Compliance at SWBC.