Finances are simply a way of life in our modern lives. You likely have a mortgage. A car loan. A savings account. A checking account. Various forms of insurance and almost certainly a credit card. All of these financial tools and accounts allow us to borrow, save and spend our money in the ways we want, and it all goes swimmingly…until it doesn’t.
The Many Types of Financial Complaints
When money is involved, things get personal quickly. While a bad purchase might be irritating, it won’t inspire the sort of passionate fury that you’ll feel when financial institutions start messing around with your bank accounts. Extra fees, inflated costs, and definitely bank behavior that seems to border on basic fraud can be infuriating. The only thing worse is when the bank hides behind their own policies and smoke screens to avoid acknowledging problems.
Financial complaints are certainly nothing new, but when they reach a head, new legislation is born to help protect consumers. This was true following the stock market crash that launched the Great Depression of the 1930s and it is true in our modern times following the Great Recession of 2008.
The Consumer Financial Protection Bureau, or CFPB, became operational in mid-July, 2011. This agency is solely dedicated to consumer financial protection, and in the few short years it has been in operation, the Bureau has been busy.
Since 2011, the CFPB has handled over 1.2 million complaints and made companies pay out almost $12 billion in penalties and enforcement costs. The CFPB is tasked with collecting, investigating and responding to consumer complaints about financial institutions. These complaints stem from a variety of sources including:
- Mortgages with hidden fees or sudden jumps in payments.
- Bank accounts over charging.
- Bank services or really, lack thereof.
- Private student loans with their heavy payments and high interest rates.
- Vehicle loans and leases with hidden fees and charges.
- Payday and personal loan that cripple you with escalating debt.
- Consumer loans with hard to understand terms and conditions.
- Credit and prepaid cards that include rate hikes and hidden fees.
- Credit reporting that include stubborn mistakes and wrong information.
- Debt collection complaints companies that don’t follow the law.
There are additional financial complaints about insurance coverage and frustrating denied claims as well as investments that were advertised as being a much better deal than they were in actuality. These complaints are handled by different oversight agencies within the government or through certification programs.
Additionally, in the United Kingdom, complaints are handled by the Financial Ombudsman. This regulatory body exists as a mediator between financial companies and individuals to investigate complaints that could not be worked out between companies and consumers. The Ombudsman does have the power to pursue damages if the company is found to be at fault for the consumer complaint.
How to Avoid Working with the Wrong Bank
Nobody wants to do business with a company that is going to treat them badly. There is no need to feel forced into rotten financial situations when there are so many resources available for avoiding the troublesome banks and companies. Chief among these resources you’ll find:
Consumer Financial Protection Bureau
Not only does the Consumer Financial Protection Bureau give consumers the government’s ear when there is fishy financing afoot, it also publishes statistics and maintains a comprehensive database of complaints that consumers can use to do their own preliminary research into banks and other financial companies before opening accounts or signing off on loan paperwork.
The Better Business Bureau
The Better Business Bureau also collects complaints that are integrated into the reported business score for the company. Scores are compiled for companies across all industry sectors, and customers can determine how long a company has been in business as well as the number of complaints and resolutions.
Websites like Pissed Consumer
Of course there are other platforms available for researching companies outside of the official government agency. Websites like PissedConsumer collects and shares financial complaints from customers about financial institutions.
Other Government Agencies
Additionally, many states have government agencies dedicated to regulating insurance institutions as well. For example, the Securities and Exchanges Commission oversees complaints about investments and other investment bank issues.
Your best bet for avoiding a bad bank is to do your research ahead of time. Start with friends and families to gather recommendations for good companies in your area. Then take your search online through the many consumer databases and complaint collections to see what may be out there to warn you off a bad deal before you even get started.
Where Do I File Banking Complaints?
There are many types of financial companies and many different regulating boards and bodies. To file a complaint against a particular company, your first step is to discover the agency with the best jurisdiction.
- The Consumer Financial Protection Bureau casts a wide net across many types of banking complaints. This is the best place to start the complaint process for most types of financial transactions. The CFPB covers student loans, credit cards, bank accounts, personal loans, payday loans, vehicle loans and leases and mortgages among other more specific financial agreements.
- The State Insurance Commissioner is a public official whose job is to regulate the insurance companies within the state. As this is a state oversight role, the complaint procedure will vary by state. You can find the state insurance commissioner for your state by searching the member list of the National Insurance Commissioner organization.
- The Financial Industry Regulatory Authority oversees many of the functions of investment banks and houses. FIRA will review complaints about buying or selling investments, brokers, insider trading, manipulation of prices, 401k and pension plans as well as retirement savings.
- The United States Government Securities and Exchange Commission oversees complaints about filing agents and larger issues with investment banks and the National Futures Association handles complaints about commodities and futures.
- The Financial Ombudsman handles the majority of financial complaints in the United Kingdom. Complaints registered with the Ombudsman are investigated if the consumer and company have been unable to find a satisfactory resolution. Financial Ombudsman complaints are resolved and the Ombudsman has the power to pursue financial recourse if the company is found to be at fault.
How Do I File a Financial Complaint?
The different agencies involved in overseeing financial matters use different procedures and websites to allow consumers to file complaints. One thing that is uniform across all platforms, however, is the requirement for supporting documents. Before you start the process of filing a complaint online, be sure that you have:
- copies of emails sent and received;
- copies of chat transactions;
- a log of phone calls and notes about your conversations with representatives from the company you are complaining about.
These items are the documentation you’ll need to officially begin the complaint process with almost any organization.
- The process for filing Financial Ombudsman complaints in the United Kingdom is straightforward. Unlike the United States which has many regulatory bodies, almost all consumer financial affairs including pensions and investments are investigated by the Ombudsman. Filing Financial Ombudsman complaints is as easy as clicking on the online form to begin the process.
- If you have issues with investments including your pension or 401k, you will want to file a complaint with the Financial Industry Regulatory Authority, or FIRA. The complaint form can be printed from the FIRA website or completed online.
- Issues with consumer banking in the United States will involve the Consumer Financial Protection Bureau. The Bureau uses an online form for submitting complaints, and there is not a paper option readily available on the agency’s website – this is an organization that fully utilizes technology.
- Complaints against insurance companies are handled on a state-by-state basis. The procedure for filing banking complaints will vary by state, but the best place to get started in the process is by locating the State Insurance Commissioner in your state.
- Highly specialized investment complaints about commodities, futures and publically traded companies in the United States are handled by either the U.S. Security and Exchange Commission, the National Futures Association or the U.S. Commodity Futures Trading Commission.
It’s impossible to not to take problems with your financial company very personally. After all, this is your financial future that is at jeopardy if a company plays fast and looses with the rules. Knowing your rights as well as who is looking out for consumers is a huge step in making smart choices with your money, including finding the companies and banks you can trust.
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal, medical, accounting, investment, or any other professional advice as individual situations will differ and should be discussed with an expert and/or lawyer.