RISK SIGNAL REPORT:

ConsumerComplaint TrendsAn analysis of trends and key Risk Signals for

companies from the CFPB’s Consumer Complaint Database

MITIGATE RISK. SAVE MONEY.

PROTECT YOUR BRAND.

Deceptive advertising has no

place in the financial marketplace.

Richard Cordray, Director of CFPB

July 28, 2015

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.)

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

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)

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

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

Consumer complaints are no longer a brand management issue.

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

Consumer Complaints on the Rise

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

Confidential and Proprietary

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

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

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

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

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

Complaints by Industry

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

comprise ~70% of all complaints in the database.

Confidential and Proprietary

Complaints by Industry

Confidential and Proprietary

Complaints by Industry

Confidential and Proprietary

Complaints by Industry

Confidential and Proprietary

Complaints by Industry

Confidential and Proprietary

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

Download a copy of our full Risk Signal Report here.

How We Help Companies Mitigate

Risk

• 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

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Learn More About your Company’s Risk Signals

from the CFPB Consumer Complaint Database

David Morgandavid@performline.com

415-871-1093lp.performline.com/cfpb-risk-signal-report

Contact us:

www.performline.com