CUSTOMER COMPLAINTS

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CUSTOMER COMPLAINTS
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CUSTOMER COMPLAINTS

• Review the Complaint
• Is the complaint within the jurisdiction of your
  agency? If not, forward to appropriate agency.
• Are there other complaints against
• The firm?
• The agent?
• The branch office?
• If there are complaints, are they similar?

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CUSTOMER COMPLAINTS

• Conduct background checks on all targets in the
  CRD and other databases such as corporate records
  and your agencys internal tracking program.
  Check registration status of all targets.
• Did the complainant provide enough information to
  work the complaint? If not, send a request for
  additional information.

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CUSTOMER COMPLAINTS

• Can the complaint be resolved by making a few
  telephone calls?
• Examples accounting problem, check not
  received, certificate not received, etc.
• Is complaint of a serious nature (such as theft,
  conversion, etc.) that requires immediate action?

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CUSTOMER COMPLAINTS

• Acknowledge receipt of complaint to complainant
• Send target letter to the home office of the
  broker dealer
• What documents do you want to ask for? Make
  request reasonable, yet adequate to address
  concerns. Consult your agencys policy on whether
  to include a copy of the complaint.

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CUSTOMER COMPLAINTS

• Do you want an affidavit or statement from
  agent, manager, compliance officer, sales
  assistant, trader, etc.
• If records are not voluntarily provided via
  target letter you may wish to consider, if
  feasible, a visit to the agents office or the
  use of a subpoena.

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CUSTOMER COMPLAINTS

• Are there other parties such as clearing brokers,
  other market makers, banks, other regulators,
  etc. that may provide useful information?

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CUSTOMER COMPLAINTS

• Review all information received.
• Is targets response adequate?
• Does complainant need to confirm/deny anything in
  targets response?
• Do other parties need to confirm any information?

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CUSTOMER COMPLAINTS

• Evaluate the target on a continual basis
• Are they being cooperative? Do the documents
  support their claims? Are they hesitant to
  release information?
• If issues are complicated or the responses dont
  seem truthful, you may want to consider taking
  the targets on-the-record testimony.
• What is/are their defense(s)?

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CUSTOMER COMPLAINTS

• Evaluate the complainant on a continual basis
• Are they being open and cooperative?
• Would they be willing to testify if the case went
  to hearing? If so, evaluate their ability to be
  an effective witness i.e. if their story remains
  consistent, if they have health issues such as
  memory loss. If not, can you proceed with the
  case without their testimony?

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CUSTOMER COMPLAINTS

• Evaluation of the complaint
• If no violations, send closeout letter. As the
  investor may file for arbitration, your closeout
  letter should be carefully worded. It is
  recommended in most cases, especially where there
  is a verbal dispute with no corroborating
  evidence, your letter indicate there are no
  apparent violations based upon the information
  in the possession of your agency.

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CUSTOMER COMPLANITS

• For example Documentation not in the
  possession of your agency, i.e. testimony, may
  be available to you but may be taken or
  provided during an arbitration hearing.

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CUSTOMER COMPLAINTS

• The reason for using this type of language is to
  dissuade a firms attorney from using your letter
  as a definitive statement in an arbitration
  against the complainant.

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CUSTOMER COMPLAINTS

• If violations are present, discuss the case with
  your supervisor or an attorney to determine the
  best course of action to resolve the complaint
  (i.e., de minimis violation letter, letter of
  caution, administrative actions, etc.)
• If administrative action is warranted, be sure
  you have documented the violations via documents
  and testimony.

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COSTUMER COMPLAINTS

• Other Considerations
• Unlike many other financial deals which are done
  pursuant to a written contract, securities
  transactions are, for the most part, done orally.
  Therefore, absent any other corroborating
  evidence, you may encounter a he said-she said
  situation.
• If your review has documented a violation, was
  there a failure to supervise on the part of the
  supervisor/firm? If so, document appropriately.
• If you are unable to document a violation,
  maintain the information in some form of database
  in the event future complaints are received.

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CUSTOMER COMPLAINTS

• Important Reminders
• Be sure to look for additional violations even
  though they are not alleged by the complainant.
  A typical example of this is a complaint where
  the investor indicates they were promised a 50
  return in one year. In addition to reviewing
  this type of complaint for misrepresentations, be
  sure to review for registration (i.e., firm,
  agent, branch office, securities) and
  suitability, etc.

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CUSTOMER COMPLAINTS

• Do not make representations to investors which
  lead them to believe you will be able to obtain a
  rescission offer/restitution for them. Remember,
  with the exception of a small number of states,
  the only established means by which a customer
  can seek a return of their funds is via
  arbitration/ litigation.