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Consumer Groups Want One-Stop Complaint Center for Banks

Consumers must now sort through five federal agencies

December 13, 2007
Consumer groups are calling on Congress to establish a single toll-free number and unified complaint system that makes it easier for consumers to complain about their bank.

The proposal mirrors one made in October by Comptroller of the Currency John C. Dugan who called for a more streamlined and consumer-friendly approach to handling questions and complaints.

In testimony before the U.S. House Subcommittee on Financial Institutions and Consumer Credit, Consumers Union and Consumer Federation of America endorsed the Financial Consumer Hotline Act of 2007, which establishes a single toll-free bank complaint hotline, and proposed additional improvements that will give consumers more relief.

Five different federal agencies, including Dugan's Office of the Comptroller of the Currency (OCC), oversee national and state-chartered banks, savings and loans, and federal credit unions, each with their own complaint system. There is no single web site, toll free number, or even paper forms that consumers can use to complain to any of these agencies regardless of where they do their banking.

“To most consumers, a bank is a bank," said Jeannine Kenney, Senior Policy Analyst for Consumers Union. “Consumers should not need to wind though a byzantine maze of federal regulators in order to get the help they need. When it is too hard to complain, not only are consumers left without recourse, but regulators don’t get a clear picture about what is going wrong in the marketplace,” added Kenney.

Four of the five federal financial services regulatory agencies reported nearly 43,000 consumer complaints (excluding inquiries) in 2006, the most recent year for which numbers are available. Kenney recommended that, in addition to the toll free hotline, the agencies develop, a seamless, uniform complaint system with a single website and complaint process."

"But even the best consumer complaint system won’t provide consumers with redress if Congress and regulators don't provide consumers with better protections,” Kenney warned. "It won’t stop excessive hold times on deposits, egregious overdraft loan fees, and unfair credit card rates and terms - practices that the law now allows."

“To make real progress in protecting consumers from the worst abuses, financial regulators must abandon the proposition that more and better disclosure can solve the problems caused by complex financial products and adopt more stringent regulations to prevent them,” added Kenney.

Dugan's plan

At least one regulator agrees, judging from Dugan's remarks to a conference his office sponsored in October.

“It makes little sense to maintain entirely distinct complaint handling systems at the five federal agencies and all the various states,” he said. “Surely we can make significant improvements without compromising the ability of each agency to use its own people and skills to address the consumer’s concerns.”

Dugan said a more integrated approach would save time and money, as well as making the process work better for all concerned.

“We have created special Web sites, built call centers that take advantage of cutting edge technology, and developed advanced systems for referring misdirected complaints to the appropriate agency,” he said. “The problem, though, is that we tend to do these jobs differently – and sometimes a lot differently.”

Dugan suggested a "gateway Web site" could serve as an interface for customers of any bank. This common Web site would not replace the consumer parts of each agency’s Web sites. Instead, it could serve to route consumers to the right agency’s Web site – through the use of some kind of easy-to-use look-up tool – to begin the complaint process.

“We’ve recently launched a Web site like this at the OCC, though it is by no means a common Web site for consumers of all banks,” Mr. Dugan said. “It’s called HelpWithMyBank.gov, and it contains frequently asked questions and answers for national bank customers; an online complaint form; and a look-up tool to help a consumer determine if his or her bank is a national bank.”

Another candidate for enhanced coordination would be our approach to complaints received by phone.

“We ought to examine whether consumers would benefit from an interagency-sponsored customer call-routing center that would expeditiously get questions and complaints to the right agency,” he said.

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