What exactly is monetary relief and when do financial institutions provide it to consumers?

Monetary relief is defined as objective, measurable, and verifiable relief that is provided to the consumer as a direct result of the steps taken or that will be taken in response to a complaint. As of December 2020, CFPB public enforcement actions have resulted in over $12.9 Billion in total consumer relief and fewer than 5% of CFPB customer complaints are resolved with monetary relief. As the new CFPB director focuses on consumer fairness and financial inclusion, how should financial institutions expect monetary relief to play a role?

Acting Director of the CFPB Dave Uejio recently shared one major focus when he stated, “I am going to elevate and expand existing investigations and exams and add new ones to ensure we have a healthy docket intended to address racial equity. This of course means that fair lending enforcement is a top priority and will be emphasized accordingly.”

The PositivityTech® intelligent platform enables you to identify and understand drivers to your biggest pain points — including areas that are not easily found nor analyzed — and can cost you the most. In this case, PositivityTech has identified the small percentage of customer complaints resolved with monetary relief, and can recommend proactive management actions to address these pain points. These actions result in better customer treatment, adherence to regulatory and legal requirements, and improvements in overall business performance.

PositivityTech’s proprietary Severity Score and Bias Index demonstrate:

  • The majority of complaints resolved with monetary relief score in the higher deciles of the PositivityTech Severity Score, indicating severe customer frustration.
  • The Bias Index for complaints resolved with monetary relief is 50% higher than all other company responses to consumers, indicating higher discrimination risk.

Exploring Monetary Relief by Product

Customer complaints resolved with monetary relief are concentrated in the following products:

During the last 90 days, the most significant increase in monetary relief can be found in the money transfer and virtual currency products. The following excerpt from a customer complaint related to money transfer sheds light on the problems that customers face. This customer’s complaint had a high Severity Score and was resolved with monetary relief:

“…I was informed by X that they were closing my account from sending and receiving money anymore and any money in my account will be locked for 180 days. This is unfair and I was given no reason other than what seems to be because my mom was sending me large amounts of money to cover my expenses…”

Exploring Monetary Relief by Issue

Customer complaints resolved with monetary relief are concentrated in the following customer-stated issues:

The PositivityTech proprietary Early Warning Triggers highlight issues to pay attention to. The following two issues triggered are two of the issues that lead to monetary relief resolution.

Competitive Benchmarking: Exploring Monetary Relief by Financial Institution

By comparing different institutions and the percentage of their customers’ complaints resolved with monetary relief, PositivityTech identified that:

  • One financial institution (Bank A) resolves more of its complaints with monetary relief consistently than any other institution.
  • Digital banks, payment companies, and fintechs are increasingly resolving their customers’ complaints with monetary relief.

Identify and Prevent Complaints that Lead to Monetary Relief

PositivityTech gets deep inside the pain points that cost you the most and reveals where you should take action. By turning your customer voices into data, PositivityTech enables you to:

  • Proactively identify which products and issues lead to monetary relief and understand why monetary relief is provided.
  • Prioritize actions to prevent customer frustration and to prevent monetary relief payments.
  • Compare your complaint resolution outcomes with other institutions across the industry.
  • Change policies and procedures to positively impact your bottom line.

With PositivityTech, find out where you stand and take action to improve practices that lead to monetary relief. To learn more, please reach out to me at Marcia.Tal@PositivityTech.com. I look forward to helping you turn negatives into positives.