ST. LOUIS--(EON: Enhanced Online News)--With acronyms like APRs and EFTs, understanding your bank’s services and policies may feel like translating a foreign language. But it’s the bank’s job to make information easy to understand, and thoroughly explain their offerings, in order to comply with consumer protection regulations and reduce the risk of fines. To uncover how six leading U.S. banks are measuring up, Maritz Research coordinated its first Bank Communications Compliance Study.
“I felt rushed. I was disappointed to not receive any materials during or after the conversation.”
The study examined results of mystery shopping audits conducted through Maritz Research’s CrowsNestTM solution, and the data shows where banks are succeeding, and more importantly, where they’re not, when it comes to customer communications. After gathering feedback about the bank’s communications practices over the phone, in-person at branch locations, and in written materials, the Maritz Research study found:
- One-third of current customers have limited understanding of a bank’s credit card offerings after speaking with a representative, and that number increases with nearly half of prospective customers saying they have low to average understanding.
- At least one-fourth of the time, a bank representative did not discuss key elements related to credit card offerings. And astoundingly, nearly three out of four customers were not told about specifics, such as minimum payments or late fees.
- While most customers said they felt that the banks treat them fairly and honestly, of those who did not feel that way – many cited reasons, including vague information and brochures, and feeling rushed in the sales process. Also, twice as many issues surfaced over phone conversations with customer service representatives versus in-person interactions.
“The results of our study indicate that banks and credit card providers have some work ahead of them to protect customers from confusing information and to avoid paying millions in fines,” said Michael Matza, senior strategic consulting director of the Financial Services Research Group at Maritz Research. “Through CrowsNest, we can help banks identify and address concerns – like confusing terms and conditions – before they become an issue for both the bank and the customer.”
Maritz Research’s expert mystery shoppers visited and called six leading banks in the U.S., as part of the Bank Communications Compliance Study. After interacting with customer service representatives – on anything from applying for a credit card, to opening a checking account, to inquiring about overdraft fees – many mystery shoppers reported feeling frustrated and confused. They commented:
- “The rep was more interested in getting me to open an account than getting to know my needs.”
- “I felt like I was a bother. [They] kept saying they had something that would fit my needs, but didn’t seem to want to go into detail.”
- “The rep was very aggressive. I felt [they were] more interested in making an immediate sale over the phone than listening to me and explaining the features of the program.”
- “The information did not clearly state the [annual percentage] rate or how it was determined, which left me with a lack of understanding.”
- “I felt rushed. I was disappointed to not receive any materials during or after the conversation.”
“Based on what we’re hearing, there are specific areas banks can address right away to reduce their risk of being found noncompliant with regulatory standards,” Matza notes. “Communication related to overdraft protection was especially confusing, but across all scenarios, common concerns were pushy sales people and vague websites or brochures. Improved written materials and enhanced training for customer service representatives, especially those who manage phone conversations, are great first steps to take.”
Brian W. Smith, former chief counsel to the Office of the Comptroller of the Currency, worked with Maritz Research to develop CrowsNest. Smith says, “It’s clear to me that this tool is needed. The criticisms and substantial fines regulators have recently levied in the consumer compliance arena have created a new enforcement dynamic dramatically heightening the importance of compliance.”
CrowsNest is intended to complement financial institutions’ existing compliance management systems, providing third-party audits and giving financial services providers the opportunity to make immediate improvements. For more information, visit www.maritzresearch.com/crowsnest.
The Maritz Research 2013 Bank Communications Compliance Study involved 780 mystery shops, which included 409 in-branch visits and 371 telephone calls to six leading national banks earlier this year. CrowsNest evaluated the banks against three federal regulations: regulation Z (Truth in Lending Act), regulation DD (fees and rates for account opening), and regulation E (electronic fund transfers).
About Maritz Research
As one of the world’s largest marketing research firms, Maritz Research, a unit of Maritz, helps many of today’s most successful companies improve performance through a deep understanding of their customers, employees and channel partners. Founded in 1973, it offers a range of strategic and tactical solutions concentrating primarily in the automotive, financial services, hospitality, technology, telecommunications, restaurant, and retail industries. The company has achieved ISO 20252 registration, the international symbol of quality. It is a member of CASRO, ESOMAR and MRA. Check out the Maritz Research blog at www.MaritzResearch.com/SoundCheckBlog. For more information, visit www.MaritzResearch.com or call 877-4MARITZ.