Client complaints rampant online

By Bryan Borzykowski | September 24, 2007 | Last updated on September 24, 2007
4 min read

Buying groceries, checking sports scores and planning a night out aren’t the only tasks your clients are using the Internet for — they’re also voicing complaints about their financial institutions.

Last week, at a regulatory compliance conference hosted by Insight Information, Carol Allen, manager of compliance at TD Insurance, said more and more people are taking to the Web to rail against their banks.

She says places like the social networking site Facebook and other chat rooms and forums allow consumers to circumvent normal complaint channels and share their stories with like-minded consumers. For proof that the web is becoming the go-to place to complain, Allen typed the word complaint into Google and got back 131,000 hits.

Consumers are more aware of their rights than ever before, Allen said, adding that this progress is positive and she’s pleased that more consumers are informed.

One challenge, however, is that clients are increasingly threatening legal action to get what they want, which forces the financial institution to respond to legal complaints rather than the customer experience.

With so many different avenues for complaint, financial institutions should take any grievance seriously. In a TD poll conducted last April, 84% of respondents said one experience could make or break their relationship with a company, while 80% felt sharing their stories could influence another person’s purchasing habits. Sixty-six per cent of consumers wanted to feel appreciated by a company through good service, not incentives.

With the proliferation of online complaints, the advisory world is facing some of the same issues as the general financial industry, since public sites are often used by clients and advisors to complain about wrongdoing.

“There’s a moral suasion here,” says Lawrence Geller, president of Geller Insurance Agencies and operator of the For Advisors Only web forum. “The consumer goes on to the social networking site and finds, lo and behold, that they’re one of hundreds of thousands of people to whom this has been done.”

He says moral suasion can lead to more class action lawsuits, as more complainants means a better chance of getting the suit heard.

Unlike writing a letter to an ombudsman, which may be read by only that one person, complaining on the Net means that when a client searches for a company’s information, the first thing that could pop up are criticisms against the business. This has some institutions worried.

“Companies don’t like to have bad things said about them,” says Geller. “Now, people do searches, and if they’re complaining about a company, they post something. Somebody else does a search and what’s the first thing that comes up? The complaint. Before you know it, there are 10,000 people who are communicating with each other.”

While curbing dissent isn’t the goal, many institutions want clients to use the proper channels to voice their concerns. The problem is that many advisors don’t know where a client with a serious issue should go.

“I don’t know if the average investor knows what the proper ways are to complain about a company,” says Geller.

It doesn’t help that complaining is often useless. He recalls a town hall meeting two years ago where investors stood up to say that their complaints were not getting heard. “There’s no such thing as redress,” says Geller. “The only redress the consumer has is in civil actions. Investor after investor said that.”

This lack of communication and attention forces clients to hit the web to make their concerns known. Geller says if the complaint becomes viral — meaning the link gets passed around and a large number of people read it — then that grievance will likely be heard. If it doesn’t catch on, there’s a good chance that gripe will be lost in the ether.

“The web is so big that people don’t often have a voice because it could easily get lost,” Geller explains.

Getting clients to complain to the right people is something Geller’s been working on. Along with Advocis, he’s been drafting a plan that will create a central place where consumers can complain about companies and advisors. Right now, the system doesn’t distinguish between the two, but this new plan would put errors and omissions and regulatory and administrative actions under the same roof.

However, that plan hasn’t been adopted by the regulators yet, and it appears they have no desire to move forward. “The ministers of finance would have to believe that they had to do something to help the consumer,” says Geller, explaining why the plan hasn’t been adopted. “I’m not sure that is a high priority to them.”

In the meantime, advisors should educate themselves on governance issues and talk to their clients, says Geller. Otherwise, you might not like what you find the next time you use the Internet.

Filed by Bryan Borzykowski,,


Bryan Borzykowski