PerformLine’s Analysis of the CFPB’s Consumer Complaint Database Reveals Risk Signals Companies Should Understand

As Regulatory Scrutiny of Marketing Practices Increases, Report Provides Insights Into How Companies Can Improve Their Regulatory Compliance Efforts, Customer Experience And Operational Effectiveness

PerformLine, the leading SaaS marketing compliance company, today publicly announced the findings from their first-ever analysis of the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database. The report, which analyzed trends and risk signals in the database, was generated in an effort to help financial institutions better understand their compliance issues and the possible implications of violations and infringements. Among the key findings were a 34% increase in the number of consumer complaints year-over-year since 2012, a 58% probability of being fined when consumer complaints to the CFPB reach above 2,000 for a company, and average fines ranging from $134 million (for companies that received 2,000-10,000 complaints) to $758 million (for companies with 10,000+ complaints).

Scrutiny of marketing practices has been on the rise, resulting in federal agencies like the CFPB, FTC, FCC and even the Department of Justice serving as watchdogs and adopting zero tolerance policies for consumer fraud and deception. The CFPB Consumer Complaint Database, in particular, was launched in July 2012 to provide consumers a centralized place to register complaints against businesses for issues with a financial product or service. PerformLine is the only company ever to create a risk signal report showing companies the risk involved when they cross from one threshold to another on the Consumer Complaint Scale.

“As federal regulators remain vigilant about compliance across industries, we felt it was necessary to take a closer look at the CFPB Consumer Complaint Database to provide companies with much-needed insights about their risk signals and how to avoid costly fines and penalties,” said Alex Baydin, CEO of PerformLine. “The findings from our report, coupled with strict enforcement actions taken by federal regulatory agencies, are clear indicators of regulatory expectations and the importance of having a comprehensive marketing compliance monitoring system in place. Unless companies can demonstrate that they are doing everything possible to remain compliant and heed the warning signs, more and more companies will find themselves, their executives and their reputation in jeopardy.”

Key findings of the report include:

• Consumer complaints are on the rise: Consumers are increasingly using the CFPB as a sounding board for their grievances. In fact, the number of complaints recorded by the CFPB has increased by an average of 34% year-to-year since 2012.
• Thresholds matter: If the CFPB has received over 2,000 consumer complaints about a company, the probability of that company being fined jumps to 58%, and to 60% 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.
• Penalties are harsh: For companies with 2,000-10,000 complaints in the CFPB database, when fined the average fine reaches $134 million. For companies with 10,000+ complaints in the CFPB database, the fine can reach $758 million on average.
• Complaints happen more in warmer seasons: The number of consumer complaints rises in March-August. Companies should prepare for the increase in consumer interactions during these months and increase staffing to handle the volume effectively.
• 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.

For a copy of this report, please click here.

PerformLine works with the top brands in lending, banking, mortgage, credit and debt services, credit cards and education, providing them the most comprehensive marketing oversight platform available. To date, PerformLine has helped clients proactively uncover and resolve more than 28 billion potential marketing compliance violations before they became issues.

About PerformLine
PerformLine is the industry’s leading marketing compliance company bringing SaaS automation and scale to companies looking to mitigate risk and ensure brand safety. PerformLine empowers marketers with the most comprehensive marketing oversight solution for multiple channels within a single platform — PerformMatch™. The PerformMatch platform automatically monitors contact centers and the web to ensure full regulatory, brand and TCPA compliance for marketers, as well as provide automated agent compliance and performance monitoring in their contact centers. PerformLine saves clients money by automating compliance activities across channels and departments, creating significant cost-savings. For more information about PerformLine, Inc. and the PerformMatch compliance platform, visit performline.com, email sales(at)performline(dot)com or follow us on twitter @PerformLine.