Column: Heading Them Off at the Pass: Address Customer Complaints Early and Often

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As a direct marketer, you know that state attorneys general and the Federal Trade Commission have the authority to investigate or sue a marketer for violation of consumer protection laws and regulations. But what prompts the government to scrutinize your business practices? One way to find yourself in the middle of an investigation or, worse, an enforcement action, is to ignore or mishandle complaints from your customers. 

Although some customers may lodge their first complaint with the Better Business Bureau (or even an attorney general's office or the FTC), this is rare. Instead, customers typically voice their complaints to the marketer directly. Usually, only when a marketer fails to address a complaint will a consumer then complain to the Better Business Bureau or the government.

The danger: Once enough customer complaints find their way to the states and the FTC (usually through the BBB), government action becomes more likely. Therefore, recording, responding to and resolving complaints will go a long way to helping you avoid problems and legal jeopardy. Here are some things you can do:


Provide a "complaint desk." You should provide customers with a way to lodge complaints (for example, a toll-free number dedicated to customer service). You should also clearly inform customers of your complaint system and encourage customers to use it. This helps route complaints to a clearinghouse you control, and demonstrates that your commitment to customer satisfaction. 

Establish a complaint system. Create an internal system for receiving, recording, and responding to customer complaints. Your internal system should: (1) document the complaint (particularly important for verbal complaints); (2) forward the complaint to the appropriate employee for attention; (3) define circumstances in which complaints must be forwarded to upper management for second-tier action; and (4) analyze complaint trends.

Listen to the customer and acknowledge the complaint. A customer who feels a complaint is being heard and considered is more likely to reach compromise and less likely to lodge a complaint with the BBB or the government. Although you should record the resolution of every complaint, you should avoid letters, form responses or any interaction that comes across as expressing indifference. Use real people when possible.  Keep it human and listen.   

Resolve the complaint consistent with company policy. You should establish policies for responding to complaints (set a policy for issuing refunds, etc.), and give your employees the authority to resolve complaints within the boundaries of those policies. If a customer has to speak to several employees before reaching someone who has authority to address and resolve a complaint, you are doing something wrong.   

Follow up with customers. Once you reach a resolution, make sure you follow-up with the customer to ensure satisfaction. If a resolution cannot be found, suggest alternative ways a resolution can be reached (third-party dispute resolution is a possibility). This will help channel even those customers who cannot be satisfied by you away from complaining to the BBB or the government. 

Theodore W. Atkinson is an attorney at Venable LLP, Washington, DC. Reach him at twatkinson@venable.com.

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