cfpb risk signal report

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RISK SIGNAL REPORT: Consumer Complaint Trends An analysis of trends and key Risk Signals for companies from the CFPB’s Consumer Complaint Database

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Page 1: CFPB Risk Signal Report

RISK SIGNAL REPORT:

ConsumerComplaint TrendsAn analysis of trends and key Risk Signals for

companies from the CFPB’s Consumer Complaint Database

Page 2: CFPB Risk Signal Report

MITIGATE RISK. SAVE MONEY.

PROTECT YOUR BRAND.

Page 3: CFPB Risk Signal Report

Deceptive advertising has no

place in the financial marketplace.

Richard Cordray, Director of CFPB

July 28, 2015

Page 4: CFPB Risk Signal Report

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.)

Page 5: CFPB Risk Signal Report

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

Page 6: CFPB Risk Signal Report

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)

Page 7: CFPB Risk Signal Report

See the Risk Signals we uncovered in our analysis of the CFPB Consumer Complaint Database

Page 8: CFPB Risk Signal Report

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

Page 9: CFPB Risk Signal Report

Consumer complaints are no longer a brand management issue.

Complaints have a direct correlation to a company’s bottom line.

Page 10: CFPB Risk Signal Report

Consumer Complaints on the Rise

Complaints have been increasing year over year in both traditional and non-traditional industries.

Confidential and Proprietary

Page 11: CFPB Risk Signal Report

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

Page 12: CFPB Risk Signal Report

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

Page 13: CFPB Risk Signal Report

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

Page 14: CFPB Risk Signal Report

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

Page 15: CFPB Risk Signal Report

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

Page 16: CFPB Risk Signal Report

Complaints by Industry

Complaints against companies in• Mortgage• Debt collection• Credit reporting

comprise ~70% of all complaints in the database.

Confidential and Proprietary

Page 17: CFPB Risk Signal Report

Complaints by Industry

Confidential and Proprietary

Page 18: CFPB Risk Signal Report

Complaints by Industry

Confidential and Proprietary

Page 19: CFPB Risk Signal Report

Complaints by Industry

Confidential and Proprietary

Page 20: CFPB Risk Signal Report

Complaints by Industry

Confidential and Proprietary

Page 21: CFPB Risk Signal Report

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

Page 22: CFPB Risk Signal Report

Download a copy of our full Risk Signal Report here.

Page 23: CFPB Risk Signal Report

How We Help Companies Mitigate

Risk

Page 24: CFPB Risk Signal Report

• 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

• Discovering, monitoring, and scoring billions of potential violations for clients, everyday

About PerformLine

Page 25: CFPB Risk Signal Report

Complying with REGULATIONS

over multiple CHANNELS

♯COMPLICATED ♯LABOR INTENSIVE

♯EXPENSIVE

We Understand Your Pain

Page 26: CFPB Risk Signal Report

potential violations automatically

risk with always-on, scalable technology

with real-time data, world-class workflow & remediation tools

DISCOVER ACT

We Have the SolutionMONITOR

Page 27: CFPB Risk Signal Report

The SaaS Platform Compliance Professionals Rely On

#AUTOMATED

Multi-Channel Coverage

#TURNKEYProprietaryRule Engine

#COST-EFFICIENTComprehensive Workflow and

Remediation Tool

on the web and in contact centers.

Page 28: CFPB Risk Signal Report

Save MoneyAutomated monitoring and centralized information

95%WEBReduction in costs PerformMatch vs F/T employee

Cost of URL Review Per Page

$0.98

$0.05HUMAN PerformMatch

Cost to review one call (avg 7.5 mins)

$4.38

$0.67

HUMAN PerformMatch

85%CONTACT CENTERReduction in costs PerformMatch vs F/T employee

Actual Client Results

Page 29: CFPB Risk Signal Report

Don’t Take Our Word For It

Named “Best Compliance Company”

4 years in a row

CHOSEN BY THE BEST VOTED THE BEST

Page 30: CFPB Risk Signal Report

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