Finding And Reporting Banking Abuse: A Guide

Dec 23, 2023 By Triston Martin

Banks may be the most influential in terms of causing us stress among the many companies we deal with regularly. Just consider: Funds you save should be kept in a safe place, like a bank.

When disputing a bill with another company, banks are generally the go-between. Customers can be severely impacted by a bank's regulations violation or human error. Because they are companies, banks are rarely driven by what is suitable or convenient for their customers but rather by the bottom line.

Banks, like any other company, are not immune to the temptation to engage in questionable or unethical business activities motivated primarily by financial gain. Whether or not you've experienced unfair banking practices, it's crucial to know your rights in the event your bank engages in illegal or questionable behavior.

Federal Trade Act, Section 5

The Federal Trade Commission was created by the Federal Trade Act and is responsible for ensuring compliance with the provisions of the Federal Trade Act. Section 5 explains that enterprises must treat customers fairly, which includes not intentionally or negligently putting them in danger.

The methods described in Section 5 are prohibited because of the potential harm they pose to customers. Statements that might mislead customers are not permitted for businesses as well.

The "Truth in Advertising" regulations included in Section 5 forbid misleading advertising, such as "bait-and-switch" techniques and "hidden fees," from being used by banks and other financial organizations.

Act of Gramm-Leach-Bliley

For compliance with the GLBA, also known as the Financial Modernization Act, financial institutions must provide you with a written statement outlining their security procedures for protecting your private data.

This explanation must be registered and updated often so everyone may read it. It safeguards consumers' privacy and identification by limiting how banks and other financial institutions can disclose customers' private information to outside parties.

Steps To Take If You Have A Problem With Your Bank

The lack of a centralized entity to which bank complaints can be sent is the biggest hurdle that customers must overcome. If you have a problem with your bank or credit union, you should take your complaint to the appropriate regulatory agency. You may utilize a few straightforward resources to zero in on the specific regulatory body that has jurisdiction over your financial institution.

Step 1: Raise Your Bank Complaint

It is recommended that customers should try working things out with their bank directly before going to any outside agency. You should get in touch with a customer support person first. Keep your cool; instead, be as specific as possible about what's bothering you and what you'd like done to fix it.

If your issue still needs to be resolved at the counter, you can ask to speak to management. You may also need to visit the branch personally to meet with a manager. The second step is to take if the bank agent is unable or unwilling to fix your issue.

Step 2: Inform The Federal Reserve of the Bank

The Federal Reserve is the best place to start because filing a complaint with this regulatory organization is easy and uncomplicated, thanks to its online form. If the Federal Reserve gets a complaint about a bank, it investigates the matter thoroughly, but it may not be able to take any action in response. That's why you need to continue on to the next section.

Step 3: Locate Your Bank's Regulator

Various organizations and bodies are responsible for overseeing the banking industry. You will need to select the appropriate one to guarantee that your complaint is resolved by the agency that receives it.

Thankfully, the Federal Financial Institutions Examination Council has developed a straightforward resource for this. You may easily find the federal bank regulatory agency that has jurisdiction over your bank by visiting their website and entering your bank's name.

When filing a complaint about a credit union, as opposed to a bank, you should do so through the National Credit Union Administration.

Following the identification of the appropriate regulatory body, you can initiate the complaint process by going to the agency's website, calling them, or sending them an email.

Optional Step 4: Contact the CFPB

This is optional, but it's another option for reporting to the bank if you have yet to have any luck with the others. To file a complaint with the Consumer Financial Protection Bureau, visit their website and fill out a form, including any relevant documentation.

The CFPB will take your complaint and submit it to the bank, where they will respond within a few weeks.

All complaints filed with the CFPB are made public on the Bureau's website, increasing the Bureau's accountability and providing further incentives for financial institutions to settle their concerns as fast as possible.

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