How Can Credit Card Issuers Keep the CFPB at Bay?

With the Consumer Financial Protection Bureau expanding oversight beyond credit cards into other areas of financial services such as Mortgages, a reasonable question arises as to what bankers can do to keep the CFPB from becoming involved with a bank’s customers. The bureau represents an alternative to which over 9,000 consumers have already turned with complaints or problems, based on a co-presentation I gave with Marla Blow of the CFPB at last week’s Card Payments Forum. Ms. Blow described how the Bureau operates in expeditiously cataloguing, communicating and tracking problems in coordination with credit card issuers.

It is a laudable objective on behalf of cardholders, but what if anything can the issuers be doing themselves to avoid the involvement of the CFPB in the first place? In the work I did preparing the presentation for the Forum and the findings from J.D. Power’s 2011 Credit Card Satisfaction Study, issuers can and should do three things to help keep the regulators at the CFPB at bay when addressing cardholders’ complaints.

1.  Educate customers to avoid problems in the first place

Customer education through transparent communication is one of the best ways to reduce a problem or complaint from arising in the first place! J.D. Power’s 2011 Card Study showed that both Transactors (who pay off balances each month) and Revolvers (those who carry balances) benefit from better understanding of their credit card terms. When these card holders completely understand their terms, only 8-9% report having had a problem or issue over the last 12 months. Compare that incidence rate to cardholders who do not understand their terms, where 12% of Transactors and a whopping 21% of Revolvers had problems when they lack understanding of their terms.

2.  Empower frontline staff to enable First Contact Resolution

The ability to address and resolve customer issues at the initial point of contact goes great strides to satisfying customers and Continue reading ›

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…But Will Cardholders Be Any Smarter?

The CARD Act of 2009 has been in force for over two years, but it may be too early to celebrate. While the Act resulted in several changes to card terms, such as interest rates, late fees and payment dates, there is clearly still room for improvement. In a recent press release, Raj Date . . . Continue Reading …But Will Cardholders Be Any Smarter?