cfpb risk signal report
TRANSCRIPT
RISK SIGNAL REPORT:
ConsumerComplaint TrendsAn analysis of trends and key Risk Signals for
companies from the CFPB’s Consumer Complaint Database
Deceptive advertising has no
place in the financial marketplace.
Richard Cordray, Director of CFPB
July 28, 2015
What is the CFPB?• An independent agency of the U.S. Government
authorized by the Dodd-Frank Act in 2010
• Responsible for:• Educating consumers• Enforcing rules for financial institutions • Studying trends in the consumer finance space
• Supervises bank and non-bank financial institutions (e.g. banks, credit unions, marketplace lenders, etc.)
What’s in the CFPB Complaint Database?
• A repository of over 464,000 consumer complaints submitted to the CFPB
• Includes the following product categories:Credit cards Mortgages Bank Accounts Student LoansConsumer Loans Credit Reporting Debt Collection Payday Loans
Consumer Complaint Database• July 2011: Began receiving consumer complaints
• June 2012: Began publishing select information from consumer complaints online
• Sept 2015: Database is a collection of 464,170 complaints, sent to nearly 3,000 companies for response
• Complaints are published after the company responds or after 15 days (whichever comes first)
See the Risk Signals we uncovered in our analysis of the CFPB Consumer Complaint Database
Consumer Complaints on the Rise
Consumers are learning they have an outlet for their complaints.
They now have direct access to an advocate, the CFPB, who can make them heard.
Confidential and Proprietary
Consumer complaints are no longer a brand management issue.
Complaints have a direct correlation to a company’s bottom line.
Consumer Complaints on the Rise
Complaints have been increasing year over year in both traditional and non-traditional industries.
Confidential and Proprietary
Complaints vs Probability of Being Fined
100-2,000 complaints
2,000 - 10K complaints
10,000+ complaints
Probability of Being
Fined6% 58% 60%
Avg. Fine $60 Million $134 Million $758 Million
Consumer Complaint Scale
When consumer complaints reach above 2,000 for a company, the probability of being fined jumps from 6% to 58%!
Confidential and Proprietary
Complaints vs Probability of Being Fined
Companies with 2,000-10,000 consumer complaints to the CFPB were almost
10x MORE LIKELY
to receive a fine than companies with fewer than 2,000 complaints.
Confidential and Proprietary
Risk Signals For Companies
Companies with >10,000 consumer complaints have average fines that are
566% GREATER
than companies with 2,000-10,000 complaints.
Confidential and Proprietary
Average Fines for Companies
The average fine amount for companies with >10K consumer complaints is $758M, compared to $134M for companies with 2K-10K complaints and $60M for those with 100-2K complaints.
Confidential and Proprietary
When Do Most Complaints Come?
Companies should prepare for the increase in consumer interactions during the summer months and increase staffing to handle the volume effectively.
Confidential and Proprietary
Complaints by Industry
Complaints against companies in• Mortgage• Debt collection• Credit reporting
comprise ~70% of all complaints in the database.
Confidential and Proprietary
Complaints by Industry
Confidential and Proprietary
Complaints by Industry
Confidential and Proprietary
Complaints by Industry
Confidential and Proprietary
Complaints by Industry
Confidential and Proprietary
Key TakeawaysIf the CFPB has received over 2,000 complaints about your company, the probability of your company being fined jumps to 58%!
If your company has over 10,000+ complaints in the CFPB database, your company could face a fine of nearly $750 million!
Stopping potentially misleading or deceptive marketing is critical.
Abiding by the CFPB Bulletin on “Responsible Business Conduct” is a must.
Confidential and Proprietary
Download a copy of our full Risk Signal Report here.
How We Help Companies Mitigate
Risk
• Founded in 2008 and solely focused on marketing compliance
• Team of industry and technology experts
• PerformMatch is the SaaS Compliance Monitoring Platform
• Real-time automated monitoring of marketing content on the web and in contact centers
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Learn More About your Company’s Risk Signals
from the CFPB Consumer Complaint Database
David [email protected]
415-871-1093lp.performline.com/cfpb-risk-signal-report
Contact us:
www.performline.com