Comptroller of the Currency

Administrator of National Banks

OFFICE OF THE OMBUDSMAN

Customer

Assistance

Group (CAG)
A Message from the Ombudsman

I am pleased to present this first report

of the OCC’s Customer Assistance

Group (CAG). Providing guidance

and assistance to consumers who

have questions or complaints involving

national banks is a uniquely challenging and rewarding responsibility.

The OCC has a long history of

providing this service to customers of national banks,

and I am very proud of the extraordinary group of

professionals who staff the CAG and strive to carry out

our mission as we advance to the next millennium.

The OCC acts as a liaison between national banks and

their customers, not as an advocate for either side.

Non-biased assistance with problem resolution benefits

all concerned, and is in keeping with the agency’s

commitment to ensure fair access to financial services

and fair treatment for all national bank customers. Solid

customer relationships — and responsiveness to customer concerns — are critical to the operations of every

national bank. Satisfied customers are the foundation of

a strong and competitive national banking industry.

This report provides an overview of the history of the

OCC’s involvement in the consumer assistance process,

along with a discussion of the issues and trends we’ve

seen since the new CAG opened in Houston in April

1998. The OCC is also required by the Federal Trade

Commission Act of 1975 (15 USC 41, et seq.) to collect

statistical data on consumer complaints involving

national banks. The CAG maintains a database that

allows for analysis of complaint activity and complaint

trends. Summary information from the CAG’s first 18

months of operation is included in this report.

I look forward to your feedback on the OCC’s Customer

Assistance Group’s first report.

Samuel P. Golden

OCC Ombudsman

1301 McKinney Street, Suite 3725

Houston, TX 77010-3034

(713) 336-4350

Comptroller of the Currency

Administrator of National Banks
OCC’s Consumer Complaint

Function—1974 to Present

Twenty-five years ago, in September 1974,

Comptroller of the Currency James E.

Smith announced the formation of a

consumer affairs division at the OCC. He charged

the new division with responsibility for handling

consumer questions and complaints, for conducting

research on consumer-related banking issues, and for

supporting bank supervision efforts.

Also in 1974, Congress enacted consumer laws

that remain in force today. The Fair Credit Billing

Act, Equal Credit Opportunity Act, and Real Estate

Settlement Procedures Act were enacted to

supplement the protections already afforded by the

Consumer Credit Protection Act of 1968 (Truthin-Lending). The Federal Trade Commission

Improvement Act of 1974, which took effect in

September 1975, mandated the creation of

consumer affairs divisions at each of the federal

banking regulatory agencies. Congress adopted

the Home Mortgage Disclosure Act in 1975. The

Consumer Leasing Act of 1976 would follow, and

the Fair Debt Collection Practices Act of 1977,

later amended the Consumer Credit Protection

Act to protect borrowers from abusive debt

collection practices.

All of these laws provide important consumer

protections that have helped national banks better

serve their customers. However, sometimes it is

difficult for bank customers to know and understand

all of their rights and responsibilities under these

laws. The CAG strives to educate customers as well

as assist them in resolving any problems they may

have with national banks.

In 1976, the Consumer Affairs Division

implemented an automated consumer assistance

information system to categorize and track consumer inquiries. In 1977, the agency received 8,224

written complaints. A large number of telephone

inquiries were also received.

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Over the years, the volume of telephone calls

received by the OCC increased, and in 1995, the

agency established a toll-free consumer hotline. In

1997, the OCC received approximately 40,000

telephone calls, and the volume continues to grow as

public awareness of the division increases.

After more than 20 years of experience providing

this service to customers of national banks, the OCC

recognized it was time to revitalize its operations.

In June 1997, the OCC Ombudsman assumed

responsibility for management of the agency’s

customer assistance function. Concurrent with

the transfer of responsibility, the function was

re-engineered to address the changing needs and

preferences of today’s national bank customers and

was centralized in Houston, Texas. In April 1998,

the renamed Customer Assistance Group (CAG)

opened and began full operation with a staff of

22 and modern call-center technology.

The new call center is staffed with banking

compliance professionals, many of whom worked

previously for financial institutions, other regulatory

agencies, or in the legal and supervisory areas of the

OCC. The CAG’s most senior specialists staff the

call center so that as many cases as possible are

resolved at the point of first contact. More than 45

percent of all complaints are resolved on the first

call. CAG specialists access current information on

banking and consumer regulations from their

computer terminals and provide callers with

answers to questions about how rules are applied

and implemented.

The OCC does not have a mandate to engage in

consumer advocacy, but it is responsible for ensuring

the safety and soundness of the national banking

system. By facilitating communications among

national banks and their customers, the CAG

supports industry efforts to sustain a broad and

satisfied customer base in a highly competitive

financial services market. The CAG’s constituents

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include customers of national banks, national banks,

and OCC bank examiners.

Call and Case Volumes

Since April 1998, the CAG has received a

steadily increasing volume of cases, both

telephone calls and written correspondence.

The CAG uses the term “case” to track written and

telephone complaints and inquiries. A complaint is

defined as an expression of dissatisfaction by a

consumer about a national bank. An inquiry is

defined as a question or comment about a national

bank or federal laws and regulations related to

banking. This chart shows the relationship.

The 50 percent to 55 percent of complaint calls

that cannot be resolved immediately on the

telephone, along with any written complaints

received, are sent to the processing unit for

research and bank contact.

In 1997, the OCC received approximately 40,000

telephone calls. For 1998, the CAG received

86,000 telephone calls. The calls received for 1999

totaled 123,000.

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CAG Incoming Call Volumes

Written

Complaints

Written

Inquiries

Phone

Complaints

Phone

Inquiries

CASES

40,000

123,000

86,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1997 1998 1999

Number of Calls
In 1997, the OCC processed 16,000 cases. During

1998, the CAG processed an average quarterly

volume of 17,000 cases, resulting in 68,000 cases

for the year. Through year-end 1999, the CAG

processed 94,000 cases.

Enhanced technology, highly qualified staff, and

centralization allowed the CAG to handle a greater

volume of calls and cases. Other factors that

may have contributed to CAG’s increased call

volume include:

• Customer service issues arising from mergers

and industry consolidation.

• Customer confusion over credit practices,

even when those practices comply with

regulatory requirements.

• Increased public awareness of CAG and greater

press coverage of consumer finance issues.

The CAG expects a continued rise in the volume

of cases, because of a continuation of merger,

consolidations, and industry expansion into new

lines of business.

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CAG Case Processing

94,000

68,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1997 1998 1999

Number of Cases

16,000
Summary of Concerns

From January through December 1999,

customer concerns focused primarily on loan

and deposit accounts, representing 49

percent and 22 percent of total cases, respectively.

Concerns ranging across a broad spectrum of other

bank products and services comprise the remainder.

Predictably, credit card and checking accounts

generate the highest level of customer cases because

they are the most common types of accounts.

Credit Cards

Credit card cases focus primarily on Truth in

Lending Act concerns (49 percent) and service

issues (26 percent). Other cases raise issues involving

the Fair Credit Reporting Act (7 percent) and debt

collection practices (6 percent) and the Equal

Credit Opportunity Act (7 percent).

Truth in Lending Act

Billing disputes and disclosures are the most

significant issues for credit card account holders.

The Truth in Lending Act (TILA) contains

error-resolution provisions that cover billing error

disputes, unauthorized use, and legal claims and

defenses a customer can employ in a dispute with a

bank. It also includes provisions covering disclosure

of annual percentage rates and changes in terms.

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Credit Card Cases

January - December 1999

Truth in Lending Act

49%

Service Issues

26%

Debt Collections

6%

Fair Credit Reporting Act

7%

Other

4%

Uniform Commercial Code

1%

Equal Credit Opportunity Act

7%

Truth in Lending Act

Uniform Commercial Code

Equal Credit Opportunity Act

Service Issues

Debt Collections

Fair Credit Reporting Act

Other
Credit card customers often misunderstand the

dispute provisions of the TILA. For example,

customers commonly believe they have blanket

protection when using a credit card and can “stop

payment” on charges. Many customer misunderstandings persist, even though customers have

received all required disclosures from their banks.

Credit card holders often believe that they are

protected from changes in terms because they have

a contract. However, customers may find existing

contract terms are modified because of changes in

bank policy or when banks transfer their portfolios

through sales, mergers, or acquisitions. In addition,

interest rates may be raised, fees added, grace

periods eliminated, or policies on late payments

tightened. Promotional terms on transferred

balances may be changed without a pay-off option.

Bank disclosures of changes are often included

among the advertising materials that accompany

credit card statements and may be easily overlooked

by customers.

Service Issues

Service issues represent a broad category that

captures customer dissatisfaction with bank

products, services, or communications with

bank employees. Service issues may be related to

regulatory concerns, but do not fall under specific

regulations. Some examples of service issues are:

• Customers’ concerns regarding their privacy.

• Increased fees and/or higher interest rates

without any perceived additional benefits.

• Dissatisfaction with the ability of bank

employees to explain clearly bank products,

services, or customer rights.

In most instances, the CAG is able to guide and

educate customers on service issues.

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Fair Credit Reporting Act/Debt Collection

Fair Credit Reporting Act issues arise typically after

a customer has already approached the credit bureau

about a bank’s reporting of account information

that the customer believes is incorrect. The CAG

facilitates an evaluation at the bank to ensure that

the credit report is accurate.

Debt collection issues often involve complaints

about the conduct of collection agents employed

by the bank. A bank customer may also assert

that the account was placed in collection in error.

The CAG facilitates a review by the bank to ensure

collection practices are within permissible guidelines

or that the account has been referred properly

for collection.

Equal Credit Opportunity Act

Many complaints involving the Equal Credit

Opportunity Act (ECOA) result from reasons

provided by banks to customers in letters declining

credit applications. Standardized declination

letters do not always provide customers with a

clear understanding of the bank’s reasons for credit

denial. In other cases, customers misunderstand

their protections under ECOA. When the basic

provisions of ECOA are explained to them by CAG

staff or provided to them in writing, customers

often realize their rights have not been violated.

The CAG considers seriously every complaint

alleging illegal discrimination under the ECOA.

If the CAG has reason to believe that illegal

discrimination may have occurred, its staff will

notify the OCC’s division responsible for fair

lending issues.

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Deposit Accounts

Customer concerns about deposit accounts focus on

the Uniform Commercial Code (21 percent) and

service issues (48 percent).

Uniform Commercial Code

The Uniform Commercial Code (UCC) covers

the negotiation and collection of checks and drafts

involving commercial transactions along with sales

contracts and agreements. Disputes over UCC issues

are primarily contractual issues between the bank

and its customer, and the OCC does not intervene.

Forged instruments, and stop-payment procedures

are two of the most common transactions that

initiate consumer calls. The customers are informed

to consult an attorney for guidance regarding these

types of transactions.

Service Issues

Service issues comprise a majority of consumer

concerns involving deposit accounts. Concerns

about deposit accounts are typically the same

as those for credit card accounts. Fees and

charges, systems/technology, and communications

collectively represent the largest causes of customer

dissatisfaction (53 percent). The remaining service

issues involve customer privacy; bank employee

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Deposit Account Cases

January - December 1999

Electronic Funds Transfer

9%

Service Issues

48%

Funds Availability Act

8%

Fair Credit Reporting Act

3%

Uniform Commercial Code

21%

Truth in Savings Act

5%

Miscellaneous Categories

6%

Electronic Funds Transfer

Service Issues

Funds Availability Act

Fair Credit Reporting Act

Uniform Commercial Code

Truth in Savings Act

Miscellaneous Categories
knowledge about terms, products and services

offered; access to bank premises or products; and

other inquiries concerning checking accounts.

Cases involving fees and charges are categorized

as service issues when no regulation exists on the

nature and amount of fees banks charge their

customers. One of the most common issues is an

increase in or imposition of additional fees (such

as fees for check cashing and presentment of checks

against insufficient funds).

Issues with systems and technology include ATM

failures, lost/misplaced deposits, or processing

problems with on-line banking.

As with credit cards, another major concern is

dissatisfaction with the ability of bank employees

to clearly explain bank products, services, or

customer rights. When customers have problems

with a transaction or a product, employees often

restate bank policy without providing clear

explanation of what the policy means or why

it has been implemented. The result can be

ineffective communication among customers

and bank employees.

The CAG routinely provides information

and educational materials to national bank

customers who call or write to the office. Improved

communication among bank customers and

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Deposit Account Service Issues

January - December 1999

Other Service Issues 

47%

Systems/Technology

29%

Fees & Charges

18%

Communications

6%

Other Service Issues

Systems/Technology

Fees & Charges

Communications
bank employees — combined with greater

understanding of applicable banking regulations

by bank employees — could result in fewer

customer cases brought to the CAG’s attention.

Often, customers have already attempted direct

resolution with the bank before contacting the CAG.

Some Lessons Learned

Bank sensitivity to customer concerns has

become increasingly important as banking

— and its law and regulation — has become

more complex. Bank sensitivity to customer

concerns can affect a bank’s position in a very

competitive marketplace. The CAG’s experience

reflects how:

• Banks benefit from customer loyalty and

favorable marketplace reputation when they

keep their customers informed beyond the

minimum regulatory requirements.

• Customers’ misconceptions often persist

even when they have received all required

disclosures; these misconceptions could

be minimized, if bank employees provided

a clear explanation of disclosures and corresponding disclosure rules when customers

express confusion.

• The empowerment of bank employees to

efficiently resolve customer concerns at the

lowest practical level can increase satisfaction

and loyalty; the dollar amount in dispute is

often lower than the cost of processing a bank

customer complaint.

• The type and nature of the bank’s primary

business line and its business practices are

better indicators of potential case volume than

bank asset size.

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Service to Others

For decades, national banks have cooperated

with the OCC to resolve customer

concerns. This benefits financial institutions,

consumers, and the OCC.

Industry Partnerships

The CAG helps facilitate regulatory compliance

and provides information to help national banks

strengthen their risk management systems. To

accomplish this, the group conducts formal and

informal meetings or discussions with bank

representatives and generates reports for individual

institutions that identify complaint trends and

consumer issues. Information provided by the

CAG can serve as an early identification warning

system for potential problems.

Educational Partnerships

The CAG facilitates communication between

a bank and its customers in the resolution of

individual cases. Customers receive information

and education on banking practices and laws.

Through the customer assistance process, the

CAG gains insight about standard bank products,

such as loans and deposits, and obtains information

about a broad spectrum of other financial products

and services offered by national banks and their

affiliates. This information provides insight into

specific issues arising from account transactions,

banking practices, and issues that may affect risk

management. The CAG also provides banks with

information gleaned from the process to enable them

to respond internally to issues that shape bank

customer satisfaction.

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Supervisory Partnerships

The CAG develops and maintains ongoing

dialogue with the OCC’s bank supervision staff.

The CAG also compiles and analyzes data and

prepares internal reports for the OCC’s bank

supervision staff that give information on volume,

trends, and categories of customer cases. Through

this process, the CAG identifies risk management

issues and potential violations of law that may be

included in the examination strategy. In an effort

to prevent systemic replication of problems

identified in individual institutions, the CAG

routinely discusses “hot topic” consumer issues

with bank supervision personnel.

Mission Statement

The mission of the Customer Assistance

Group is to ensure bank customers

receive fair treatment in resolving

their complaints with national banks and to

provide courteous and professional service by:

• Educating consumers on federal banking laws

and regulations; on dealing with national banks;

and on the Office of the Comptroller of the

Currency’s authority to resolve complaints.

• Facilitating the resolution of complaints

from customers of national banks.

• Handling most customer cases on a

toll-free hotline.

• Analyzing complaint data to ensure the OCC

considers complaint information in conducting

supervisory activities and developing policies.

• Providing national banks and consumers with

statistical information.

• Fostering a “Best in Class” operating model

for the Customer Assistance Group.

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These mission elements are achieved through

identifying customer expectations and needs,

developing processes designed to meet those

expectations and needs, and staffing with compliance

specialists able to fulfill both customer needs and

the OCC’s responsibilities. Call us at 800-613-6743.

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Organizational Structure

OCC Customer Assistance Group

Deputy to the

Ombudsman

Ombudsman

 

Assistant

CAS Team 

Leader

Customer

Assistance

Specialists

Quality

Dev Team

Leader

Consumer

Complaint CAS Team Analysts Leader

CAS Team 

Leader

Customer

Assistance

Specialists

Customer

Assistance

Specialists

Support

Staff