Raise your hand if you’ve ever had a problem with a financial product or service? Maybe your bank or credit union mistakenly assessed an overdraft fee on your checking account. Or maybe your student loan servicer misapplied your most recent loan payment. Or maybe some debt collector is bombarding you with phone calls claiming you owe money on some debt that doesn’t belong to you.

If you’ve been a consumer long enough, you’ve probably experienced some type of issue in the financial marketplace. Most of us have. I have.



What do you usually do to get these situations resolved?

Most people call customer service. That’s where I’d start too.

Unfortunately, the process doesn’t always lead to a timely resolution. You call and wait on hold for what seems like an eternity. Then you finally speak to someone who doesn’t quite understand the situation or doesn’t have the authority to do anything. They transfer you to their supervisor. You wait on hold for another 20 minutes before you get to explain the whole situation all over again. Sometimes they fix the problem. Sometimes they tell you there’s nothing they can do.

It’s great when they acknowledge that they made a mistake and they reverse the fee or credit your account. It might have cost you some time and frustration but at least the money is back in your account.

But what do you do when they refuse to fix the problem?

What You Can Do When Your Financial Institution Won’t Fix a Mistake

The more active you are in the personal finance space, the more likely you are to encounter issues with a financial product and service. It’s really just a matter of time.

I’ve done it all, from credit card churning, to taking advantage of bank account sign up bonuses, to simply experimenting with various financial products and services just to see what works best for me.

Most of the time things go smoothly. But every now and then, things go awry.

Like most people, my first step is to call customer service to get things straightened out. Usually, they review my account, discover a clerical error, and quickly resolve the issue. But sometimes they don’t seem very interested in identifying the issue or understanding the problem. Heck, sometimes the company won’t even respond at all.

When I realize that there’s no amount of evidence or explaining that will get the company to respond or take action, I’ll turn to a third-party for a little extra help.

There are a number of entities and agencies that can help consumers get their problems resolved, and each of them plays a unique role in the dispute process. Let’s look at some of those options and discuss what you can expect when you get them involved.

The Better Business Bureau

The Dollar Build - BBBJust about everyone has heard of the BBB. One of the BBB’s features is a complaint channel, which in some cases can prove useful in getting a business to give your dispute a second look. But let’s be clear about one thing – the BBB is not a government agency or a consumer watchdog.

The BBB is funded by annual dues paid by businesses seeking BBB accreditation and the right to slap the iconic BBB logo on their website or storefront. Although the BBB assigns businesses a letter grade (ranging from A+ to F) based on several factors – including the number of complaints filed against a business and their responsiveness to those complaints – the BBB can’t force a business to answer or take appropriate action in response to a consumer complaint.

In fact, the BBB only cares that a business has made a “good faith effort to resolve complaints.” This means that a business could still have a good grade even if it summarily dismisses your complaints, as long as it provides a thoughtful response.

I’ve submitted complaints to the BBB in the past and have gotten mixed results. I’d say it’s worth a shot, but don’t get your hopes up. The BBB complaint portal is primarily a means of getting the business’s attention. Just don’t expect the BBB to come to your defense no matter how egregious the business’s error – that’s just not what the BBB is about.

State Attorneys General

The Dollar Build - State AGIn some ways, the Attorney General’s Office in your respective state is not unlike the Better Business Bureau. Like the BBB, state attorneys general offer an informal complaint resolution service so their residents can request assistance or additional information about a business located in their state. If a business refuses to respond or correct an issue, the Attorney General’s Office cannot compel them to do so.

Your Attorney General’s Office probably receives hundreds or even thousands of complaints each month, and like most state agencies they probably don’t have sufficient resources to do much more than forward your complaint to the company. In that sense, they function much like the BBB. They facilitate communications between consumer and business.

But here’s the biggest difference – the Attorney General’s Office is authorized to bring legal action. Of course, they can only bring legal action in the name of the State and they cannot represent private citizens in legal disputes, but sometimes merely bringing an issue to the attention of a state official is all it takes to get a local business to remedy the situation.

You may have guessed that some disputes that are better suited for this type of process than others. You are probably wasting your time complaining to the State Attorney General’s Office about issues related to customer service or general quality of service. As a general rule, your State Attorney General’s Office will pay more attention to allegations that a business has violated state consumer protection statutes.

If you believe a business has engaged in unfair, misleading or harmful conduct, then I’d recommend you contact your State Attorney General’s Office if efforts to resolve the issue directly with the business have gone nowhere.

The Consumer Financial Protection Bureau (CFPB)

The Dollar Build - CFPBHere’s my go-to for getting businesses to take action. As a consumer finance attorney, I know that the mere mention of the CFPB is enough to get most financial institutions to take a closer look at just about any consumer dispute – even if they don’t believe they’ve done anything remotely questionable. There isn’t a single financial institution in the country that wants to get a knock on their door from this federal consumer watchdog agency, so most will go the extra mile to make a complaint go away.

In case this is the first time you’ve heard of the CFPB, let me tell you a little bit about the agency. The CFPB is a federal consumer protection agency that was formed after the 2008 financial crisis. Established in 2011, the Bureau has secured more than $10 billion in relief for consumers during its brief existence. The agency’s mission is to empower consumers by providing tools to help them make well-informed financial choices and to protect consumers by taking action against companies that violate the law and harm consumers.

One of the CFPB’s best features is its complaint portal which allows consumers to bring their issues to the attention of both the company and the CFPB. According to the CFPB’s website, 97% of consumers who submit a complaint get a response within 15 days.



I can tell you that I’ve put this to the test several times and have gotten prompt responses and near-immediate action from the companies involved on each occasion.

For example, last year I had a dispute with CitiBank regarding an account opening promotion. After opening a checking account and completing all of the requirements to qualify for 40,000 Thank You Points, CitiBank refused to honor the promotion. They claimed that their customer service agent should not have led me to believe that I could take advantage of the promotion. After speaking with several customer service representatives I eventually realized there was nothing I could say to convince them to honor the promotion. So, I filed a complaint with the CFPB. Within two weeks, CitiBank responded. CitiBank apologized for the inconvenience and credited my account with the promotion points.

I can confidently say that if I had not submitted a complaint to the CFPB that CitiBank would not have honored the promotional offer and I would have never received the 40,000 points (approximately $400) that I was owed.

Bonus Tips

Here are a few bonus tips I’ve picked up along the way that can save you some time and frustration when trying to get things resolved.

1. Read the terms and conditions before you submit a complaint.

Get your facts straight by reading the relevant terms and conditions before you submit a complaint. Sometimes we feel like we’ve been wronged, but we really haven’t. We just don’t like the terms we’ve agreed to. Take it as a learning experience. Don’t waste your time or anyone else’s by submitting an outlandish complaint just to see what you can get.

2. If it’s important, document it.

I’ve learned this one the hard way. Make sure you always ask for follow-up confirmation in the form of an email, account notes, or some other documentation that memorializes important arrangements you’ve made with your financial institution. It will come in handy if you need to produce evidence to substantiate your claims later.

3. Be nice.

Whether you are making progress with the customer service representative or not, acting rude and impatient won’t make them any more likely to help you.

4. If your situation is very complicated or involves a large sum of money, then consider contacting a qualified attorney to assist you.

The self-help approach is great for small dollar disputes or situations where you aren’t really losing anything (e.g., my dispute with Citibank where I didn’t suffer any out-of-pocket costs). But if you’ve been seriously wronged, then be prepared to contact an attorney who can truly represent your interests. At the end of the day, the BBB, state attorneys general, and the CFPB are merely intermediaries; they don’t represent you.

Conclusion

To be clear, I’m not suggesting that we start whining and complaining every time we think we’ve been mistreated or end up on the wrong side of a misunderstanding with our bank or credit card company. And I definitely don’t buy into the mantra that “The customer’s always right.”

But I do believe that there are times when financial institutions should be held accountable for engaging in misleading practices, especially when those mistakes negatively impact consumers. For that reason, I am glad that there is an agency like the CFPB that we can turn to as a last resort when we feel like we are David battling Goliath.

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