The Federal Trade Commission ("FTC") has issued its
2012 annual report of consumer complaints from its Consumer
Sentinel Network, an online database used for tracking
complaints. The FTC received more than 2 million complaints
overall, from multiple sources including its own consumer complaint
hotline, other federal agencies such as the Consumer Financial
Protection Bureau ("CFPB"), several state Attorneys
General, state regulatory agencies, the Better Business Bureaus,
and other nongovernmental organizations.
Federal and state law enforcement agencies can and often will use
information in the database to enhance and coordinate
investigations and in formulation of regulatory
priorities.
2012 Rankings of Complaints
The complaint categories making up the top 20 are:
Rank | Category | Complaints | Percentages |
1. | Identity Theft | 369,132 | 18% |
2. | Debt Collection | 199,721 | 10% |
3. | Banks and Lenders | 132,340 | 6% |
4. | Shop-at-Home and Catalog Sales | 115,184 | 6% |
5. | Prizes, Sweepstakes, and Lotteries | 98,479 | 5% |
6. | Impostor Scams | 82,896 | 4% |
7. | Internet Services | 81,438 | 4% |
8. | Auto-Related Complaints | 78,062 | 4% |
9. | Telephone and Mobile Services | 76,783 | 4% |
10. | Credit Cards | 51,550 | 3% |
11. | Foreign Money Offers and Counterfeit Check Scams | 46,112 | 2% |
12. | Advance Payments for Credit Services | 42,974 | 2% |
13. | Television and Electronic Media | 41,664 | 2% |
14. | Health Care | 35,703 | 2% |
15. | Mortgage Foreclosure Relief and Debt Management | 33,791 | 2% |
16. | Business and Job Opportunities | 32,496 | 2% |
17. | Travel, Vacations, and Timeshare Plans | 30,324 | 1% |
18. | Internet Auction | 29,553 | 1% |
19. |
Credit Bureaus, Information Furnishers and
Report Users |
29,268 | 1% |
20. | Office Supplies and Services | 24,210 | 1% |
A full listing of complaint categories is available in the
report. In addition, the report gives national data, as well
as a state-by-state accounting of top complaint categories and a
listing of the metropolitan areas that generated the most
complaints.
CFPB, Other Governmental Agencies, and Others Contribute to Report
According to the report, the CFPB contributed almost 20 times as
many complaints as it did in 2011, which was the first half year of
its existence (83,740 up from 4,098). The complaint database
also includes complaints filed with state law enforcement
organizations, other federal agencies, BBBs, and private sector
companies. In total about 60% of the complaints are
contributed by non-FTC organizations.
Tips to Help Address Consumer Complaints
Not every complaint indicates a violation of law. In
addition, investigators should consider the context and reliability
of complaints. However, the reality is that FTC, CFPB, and
other enforcers will analyze consumer complaints to assist in the
identification of potential unfair, deceptive, or abusive practices
and other violations of law.
Investigators frequently obtain samples of consumer-level data
during the course of investigations. For the consumer-level
data, investigators will focus on whether the consumer is treated
reasonably, fairly, and without deceptive conduct. By way of
example, investigators will review the products and services
provided, compare them to the records in the company's primary
computer system, and compare them to all statements made in
communications from the consumer, including consumer
complaints.
The below set of tips can help to reduce consumer complaints and
prepare for potential scrutiny:
- Take steps to be responsive and responsible in handling consumer complaints and inquiries.
- Address and resolve complaints and inquiries, whether regarding the entity or its service providers, in a prompt manner.
- Use intelligence gathered from consumer contacts to help evaluate compliance, fulfillment, and overall customer satisfaction.
- Escalate complaints that raise legal issues involving potential consumer harm from unfair treatment or discrimination, or other regulatory compliance issues, as appropriate.
- Develop a process to organize, retain, and use consumer complaint information as part of an overall compliance program.
- Develop written policies and procedures for receiving, escalating, and resolving consumer complaints and inquiries.
Ignoring consumer complaints can have potentially disastrous effects on a company's bottom line and legal exposure. Moreover, it is more than likely that federal and state enforcers will take some of their cues from the consumer complaints their agencies receive. Understanding the type of complaints and the process can empower your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.