When A Customer Says, “You’re Destroying My Life”

“This woman says Equifax mixed up her father’s credit report and ‘destroyed’ his life — and now she hopes to convince a jury,” begins a recent article in MarketWatch. The article details the tragic story of James Rennick, a man who requested a home-equity loan for renovations that would help his dying wife breathe more easily – but was denied the loan because his credit history information was mixed up with someone else’s. Rennick filed a lawsuit, but both his wife and he died before the problem was solved.

Unfortunately, this issue is not a one-time occurrence. In fact, in 2013, Equifax’s expert witness at another trial stated that credit mix-ups may occur in 1% to 2% of all files. In addition to putting Equifax’s problems in the public eye once again, this article highlights the issues that are intrinsic to credit scores, which we covered in the past.

The story was especially compelling to us because it featured a powerful word in a customer’s complaint: “destroy.” Do customer complaints to financial institutions commonly feature the word “destroy”? If customers use the word “destroy” in their complaints, what might we be able to predict about their future actions?

Uncovering the hidden value of the word, “destroy”

To gain deeper insights into this word usage, we explored the word “destroy” in over a million complaints in the PositivityTech intelligent platform. We discovered the following:

  • Proprietary Severity Score: 44% worse than the average complaint

Our propriety severity score is built on financial language and captures both the customer’s emotion and the seriousness of their standpoint. Customer complaints featuring the word “destroy” reveal that they have a severity score that is 44% worse than that of the average complaint, indicating the customers’ high level of frustration.

  • Proprietary Lawsuit Score: 18% higher than the average complaint

Our proprietary lawsuit score shares the likelihood that a customer will file a lawsuit, based on their complaint. Customer complaints featuring the word “destroy” reveal that the complaining customers are 18% more likely to file a lawsuit.

  • Proprietary Account Closure Score: 13% higher than the average complaint

Our proprietary account closure score shares the likelihood that a customer will close their account, based on their complaint. Customer complaints featuring the word “destroy” reveal that the complaining customers are 13% more likely to close their accounts.

Transforming negatives to positives

While in the past, we may have regarded emotional complaints as just that, we now see that they can hold deep business implications. Through the PositivityTech platform, we can see the significance of a single word and predict its business impacts.

If you’d like to learn more about the hidden value of your customers’ words, please email me at marcia.tal@positivitytech.com. I look forward to speaking with you.

Complaints about digital money transfers are on the rise

It’s not surprising that digital money transfer services such as Venmo, PayPal, and Zelle are becoming so popular. The convenience and immediacy of paying for services, splitting a check after a dinner out with friends, or issuing a bill to a client feels satisfying and smart. But with ease of use also comes the ease of making an error — and accidentally choosing the wrong username or code can put your money or data into the wrong hands.

In fact, the PositivityTech intelligent platform’s proprietary trigger algorithms have illuminated an increase in complaints about digital money transfers. By listening to every customer’s voice and then analyzing what their complaints mean collectively, our triggers detect complaints before they become big problems for your bank or your own account.

While customer complaints about digital money transfers are still very small in number and are a relatively small complaint category, they are steadily rising and predict an emerging trend that merits banks’ attention now. After all, customers expect banks to protect them. Regulators also hold banks accountable.

Statistical analyses for near-term business impact may tend to disregard these low-volume complaints. But customers who are embracing digital money transfer are the early adopters of a capability that is quickly becoming mainstream. Interestingly, using the PositivityTech platform, we have seen that complaints about banks’ digital money transfer tools are growing at the same rate — and sometimes an even faster rate — than complaints about many of the newer tools. We believe that early adopters of technology usage can tell us where future complaint issues will scale and can reveal new opportunities for product and service differentiation.

Here are the growth rates in digital money transfers (based on the CFPB data and complaint categories), just since 2017:

Complaint Category Growth
Money Transfers 191%
Subcategory: Managing Mobile Wallets 457%
Subcategory: Unauthorized Transactions 1025%
Subcategory: Fraud or Scams 2250%

Below are two examples of related customer complaints.

 “I have experienced fraud in my [NAME OF BANK] checking account… A transaction of $1,800 was transferred from my account through the bank’s money transfer system. The amount was sent to someone named X. I do not know who that is and I did not authorize the payment. I have filed a dispute claim to the fraud team, but they have denied it by saying according to their investigation, they cannot prove fraud… As one of the leading financial institutions, [NAME OF BANK] should be doing more to listen to their customers and their plight rather than training their employees to repeat what’s on their screen.”

 “A transaction from XX was sent to a person by the name of XX… I was not aware… When I went to my bank, I realized a payment of XX was removed from my account… I am disappointed and I want my account credited… Bank managers were extremely rude and advised that I will never get that money back and sorry for my loss of funds. Banks are supposed to work for the people and determine right from wrong… I want my funds returned.”

 An exciting opportunity for banks

From listening to these customer voices, it is evident that people continue to rely on their banks for security and safety. As the world of digital money transfer tools continues to grow more robust, banks do not need to lose out to fintechs. Banks have an exciting opportunity to reposition themselves, providing the security and safeguards that customers expect and value from them and further differentiating their brands.

If you’re interested in discussing how your institution can get ahead of the market and meet your customers’ needs in the digital age, please reach out to me at marcia.tal@positivitytech.com.

Why Does How You End A Relationship Matter?

What’s the best way to leave a job? What’s the optimal way to end a professional relationship? My mother always advised me to keep the door open — just in case I want to return one day. “Things change and you never know what the future might bring,” she told me.

The same maxim can be applied to account closures. In financial institutions, an account closure occurs when either the institution proactively closes a customer’s account, or when the customer chooses to close their account. While not all account closures are easy and banks might expect customers to complain when the bank initiates the closure, banks want the account closure experience to be as seamless as possible.

After all, just because your customers’ accounts close, doesn’t mean they won’t want to reopen their accounts in the future. So, how can financial institutions ensure a positive ending that leaves the door open?

To find the answer to this question, we explored over one million complaints in the PositivityTech platform — identifying customers’ complaints about account closure and predicting their future risk. (Both steps are critical to understanding why customers’ accounts close and what your actions should be.) Ultimately, we learned that negative input can have a positive impact.

Here are the steps we took:

Identify the pain points associated with account closure.

Within the PositivityTech platform, we identified seven sub-issues in customers’ complaints about account closures — those initiated by institutions and customers. These sub-issues include, for example, “change in terms” and “fees charged for closing an account.” Below are two examples of customer complaints about account closure. We have hidden the identities of the banks mentioned.

“I received a credit card from [X Bank] that I did not request. I have called twice to request that the account be closed and both times, they refused to honor my request without me giving them my social security number. I refused to give this information out… My credit file was frozen several months ago to prevent fraudulent applications. I don’t know how this application was processed despite the freeze. The company suggested that I walk into one of their branch offices to get a telephone number for their credit fraud department rather than trusting the number on unsolicited mail. There are no service branch offices near me.”

“I initiated opening an account with [X Bank]. Today, an account closing was initiated by the company. I noticed what was done when checking my account online. I then called the bank to find out what was going on. According to a customer service representative, the account was closed due to suspicious activity. No further details or explanations could be given on the case because not enough information was available to the representative. The company failed to inform me of their actions and completely disregarded me as a customer. The company then charged me a whopping $25 closing fee.”

Understand the severity score of these customer complaints within these specific pain points.

The specific pain points driving these customer complaints have a PositivityTech proprietary severity score that is 6-8% worse than that of the average complaint.

Predict the likelihood of these customers going into debt collection.

The PositivityTech platform’s proprietary debt collection score reveals scores that are 76–95% lower than the mean. Interestingly, customers who complain about their account closure pose a low credit risk to financial institutions.

Predict the likelihood of account closure.

Each of the seven sub-issues show a very high likelihood of account closure, even while they reveal a low threat of future risk.

Prevent bad relationships with customers who close their accounts.

Customers who complain about how they are treated when their accounts are closed — and customers who do not complain — pose a low risk of not paying. In fact, they present a hidden segment opportunity for financial institutions to win back profitable customers.

While customers’ pain points are not significant in volume, they are very significant in severity and in predicting account closure. In one institution, we found that one of the strongest predictors of account closure was present in only 3% of all customer complaints.

Flip the script on customer complaints about account closure.

By exploring customer complaints about account closure, we were able to pinpoint past customers’ potential for future business opportunities. Understanding and addressing the root causes of these complaints can reduce customer churn and even alleviate future customer frustrations.

With the PositivityTech platform, customer feedback fuels businesses with the insight they need to identify issues and uncover actions. If you’re interested in learning how it can help your revenue grow, please reach out. I’d be happy to speak with you.

Why Complaints About Credit Scores Are So Complex

My son recently applied to rent an apartment, and when I became a guarantor on his lease, the landlord needed to run a credit check. Utilizing my banks’ tools, I saw that my credit scores were within two points of each other. Then, I received my score from the rental property agency — and I was surprised to find that it was 80 points lower.

Credit scores vary widely for a variety of reasons. Institutions use different scoring algorithms — and even different versions of the same scoring algorithm. Lenders have different schedules for reporting credit information to credit bureaus. Customers use their credit products daily in ways that impact their credit scores. Bureaus record the information in different ways and create different variables. Ultimately, these disparities have big impacts on individuals’ interest rates, interest terms, and the amount of credit lent.

To get to the bottom of my credit score disparity, I contacted the credit bureau that sent me my lowest score. Unfortunately, there was no option to speak to a representative.

Surprising Truths about Our Customers’ Complaints

With no one present to listen to customer voices, I decided to explore how customers are responding to credit score disparities using the PositivityTech intelligent platform. Here is an example of one customer’s complaint:

“I have been trying to repair my credit for the last year [because] I am trying to buy a home. However, the three credit bureaus have been reporting different credit scores… [one] seems like it takes 30 to 40 points off my score and drops it way back down… All my payments and credit cards are all paid up and I only get a 3 to 4 points increase. That’s just not right and I want this fixed.”

By assessing over one million complaints in the PositivityTech platform, we identified surprising findings about customer complaints related to credit score disparities that financial institutions are likely missing.

  1. The Inaccuracies of Off-the-Shelf Sentiment Scores

A widely used off-the-shelf sentiment score, which is not built on customer language about banking products, assigned a positive score to a complaint about credit score disparities and missed the customer’s discontent. In contrast, our proprietary Severity Score, which has a lexicon built on financial language, assigned a negative score to the same complaint — confirming what we intuitively know.

    • Off-the-Shelf Sentiment Score: +0.98
    • Proprietary Severity Score: -0.96
  1. Worse than Average Severity Scores

Customer complaints related to credit score disparities have a proprietary Severity Score that is 30% worse than the average complaint’s Severity Score.

  1. Duplicate Complaints

By using the PositivityTech platform, I quickly found that customers with disparate credit scores submit duplicate complaints — copying and pasting the same complaint to multiple financial institutions. This further emphasizes the severity of their complaints.

Flip the Script on Customer Complaints about Credit Scores

Fortunately, I was able to be a guarantor on my son’s lease, so my credit score disparity did not disrupt my son’s plans. Yet, credit score disparities do negatively impact individuals’ life decisions every day.

Ultimately, the issue of credit score disparities does not lie with one institution, and the solution is complex. By listening to their customers, financial institutions have the opportunity to flip the script on these and other customer complaints. Let us show you how.

Feel free to message me on LinkedIn. I look forward to speaking with you.

Uncovering Value in Customer Complaints About Overdraft Fees

A friend’s daughter was recently purchasing groceries when her debit card was declined. Embarrassed, she stepped out of the line to check her bank balance on her phone. As it turned out, she had an overdraft of $200 — and a $35 overdraft fee on top of that. In a linked savings account, she had more than enough money to pay for the groceries. But, it was too late. She hadn’t transferred the money over in time.

The overdraft fees that affect so many of us have become a hot topic of conversation, and this summer, the Consumer Financial Protection Bureau (CFPB) is reviewing the 10-year-old rule that sets limits on banks’ overdraft fees. This rule, which was adopted in the aftermath of the 2008 Financial Crisis, mandates that financial institutions issuing debit or credit cards must get customers’ permission before enrolling them in overdraft protection programs.

  • In 2018, bank customers paid a total of $11 billion in overdraft fees to US banks.
  • Today, bank customers incur an average of $35 in charges each time their accounts overdraft.

While the complaint issue categorized as “overdrafts and fees” is only a fraction (less than 5 bps) of all complaints submitted to the CFPB since 2011, companies’ responses to their customers drive much dissatisfaction. In fact, even when a customer is refunded for an overdraft charge, the customer may still have a negative perception of the bank.

With the PositivityTech platform, my team assessed over one million customer complaints in the CFPB database and homed in on customer complaints related to overdraft fees. By holistically studying this dataset and listening to customers’ voices, we identified findings that make it possible to predict future overdraft fee issues and define preventive actions that can impact customer satisfaction, regulatory relationships, and financial performance.

Listening to Our Customers’ Complaints About Overdraft Fees

First, let’s explore three real-life examples of customers’ complaints about overdraft fees:

When I opened my savings and checking accounts, I specifically requested [the bank] to not allow overdrafts in my accounts… Selecting this option gave me peace of mind since I knew that if I wanted to pay for something but I didn’t have enough money, [the bank] would just decline the transaction and I would know I was running low on my balance. [But] some payments using my savings account were not only not declined, but a ridiculous number of overdraft fees were charged to my account. I did not notice anything because I didn’t receive any text message or email alerting me of the situation. 

[My bank] charged a service fee and overdrafted my account twice. I’ve tried calling, chat (waited 20 min)… I thought that I was going to get that service fee waived because I had the requirements within the dates of the same billing cycle. 

I knew that I had some significant charges that were going to hit my account, so I transferred $3,000 from my savings account to my checking account… However, the bank still hit me with an overdraft fee… Even though [the representative] stated that the $3,000 was transferred to my account, it was not credited to my account [in time]. [The bank} always holds the funds for a day before crediting them to my account, which seems unethical and illegal.

Understanding the Urgency in Our Customers’ Complaints

Next, we explored the PositivityTech platform’s proprietary Severity Score, an algorithm designed to shed light on the business urgency of a customer complaint and a leading indicator of future adverse actions. We found that customer frustrations related to overdraft fees:

  • Are 24% worse than that of the average complaint.
  • Are the worst when a customer is closing on a mortgage.
  • Have the highest volume when customers’ funds are low.

Challenging Banks’ Assumptions

While many may assume that customers who overdraft are high risk, their narratives and reasons for overdraft show that they are actually a mixture of high- and low-risk customers. By utilizing the PositivityTech platform, we found that customers who share complaints about overdraft fees are:

  • Almost 20% less likely to close their accounts due to delinquency.
  • Over 40% less likely to fall into debt collection as compared to all complaints.
  • 5% more likely to close their accounts.

Responding to all overdraft customers in the same way will drive non-delinquent and revenue-generating customers to look for alternative resolutions.

Responding in a Multifaceted Way

Interestingly, financial institutions responded to many customers who complained about overdraft fees by providing monetary relief, acknowledging the challenges they face in the execution of regulations.

  • 45% of overdraft fee-related complaints result in monetary relief to the customer.
  • 9% of all CFPB customer complaints overall result in monetary relief to the customer.

Yet, providing compensation to address these issues is not a unilateral strategy that will improve customer satisfaction. Additionally, without improved targeting, monetary relief can be costly and ineffective. With customer complaints about overdraft fees increasing over time, anticipating and avoiding overdraft complaints is critical.

During the last 12 months:

  • The average monthly volume of customer complaints about overdraft fees has increased by 300%.
  • The average monthly volume of overdraft fee complaints resolved with monetary relief has increased by almost 3x.

With the PositivityTech platform, we have been able to understand customers’ behaviors by listening to their voices. Deeply understanding what our customers are saying drives predictive capabilities, which benefit all business functions; preventive actions that can address customer satisfaction; and regulatory and financial opportunities.

My team and I are ready to meet with you to share more of our findings about the hidden value in customer complaints.

The PositivityTech platform integrates with existing systems so that you can easily bring our platform to your organization. Learn more about it here.