In our last blog, we introduced you to the federal law known as the Dodd-Frank Act/UDAAP, which was enacted and is enforced to protect consumers of financial products or services from any claims, statements, or practices which are considered to be unfair, deceptive, or abusive…or which are in any way misleading.
We have an idea of what those practices consist of, whether they are false or misleading statements—or just as importantly, omissions of important information which customers need to know before they buy what you sell.
However, how do companies know what consumers find to be confusing or troubling? It goes without saying that accuracy, transparency, and clear, unambiguous, forthright statements about the products and services a business provides is critical. But is that enough?
In order to consistently protect one’s business, it is essential to pay attention to what consumers say about businesses, the advertisements, the services, and quite frankly about the way it deals with consumers and how fairly it deals with consumers.
Do that by listening—listening to consumers, who are your customers.
Consumer complaints can and do play an important role in helping companies determine whether advertisement statements, service descriptions, or conduct in the marketplace is perceived as unfair, deceptive, or abusive in any way. In fact, such complaints can be an indispensable source of information. The same types of complaints by consumers which can cause investigations, enforcement and sanctions by authorities can, if you pay attention, help companies avoid such costly and debilitating investigations and sanctions—and ultimately benefit the companies in the marketplace.
Consumers can reveal shortcomings in the representations companies make, and can reveal flaws in the company’s compliance management system which can in turn help improve marketing/advertising; how a company monitors its marketing; and perhaps most of all, how vigorously and thoroughly to train company employees.
Being smart—and vigilant and ethical in the markets you serve is critical and can avoid committing any UDAAP violations —thereby avoiding not only reputational harm, but also the risk, exposure and potentially debilitating expenses of navigating and defending enforcement investigations and actions, and in extreme cases, civil and even criminal enforcement.