CUSTOMER COMPLAINTS. Review the Complaint Is the complaint within the jurisdiction of your agency?...

CUSTOMER CUSTOMER COMPLAINTSCOMPLAINTS

CUSTOMER COMPLAINTSCUSTOMER COMPLAINTS

Review the ComplaintReview the Complaint• Is the complaint within the jurisdiction of your Is the complaint within the jurisdiction of your

agency? If not, forward to appropriate agency? If not, forward to appropriate agency.agency.

• Are there other complaints against:Are there other complaints against:• The firm?The firm?• The agent?The agent?• The branch office?The branch office?• If there are complaints, are they similar?If there are complaints, are they similar?


Conduct background checks on all targets in Conduct background checks on all targets in the CRD and other databases such as the CRD and other databases such as corporate records and your agency’s internal corporate records and your agency’s internal tracking program. Check registration status of tracking program. Check registration status of all targets.all targets.

Did the complainant provide enough Did the complainant provide enough information to work the complaint? If not, information to work the complaint? If not, send a request for additional information.send a request for additional information.


Can the complaint be resolved by making a Can the complaint be resolved by making a few telephone calls?few telephone calls?Examples– accounting problem, check not Examples– accounting problem, check not received, certificate not received, etc.received, certificate not received, etc.

Is complaint of a serious nature (such as theft, Is complaint of a serious nature (such as theft, conversion, etc.) that requires immediate conversion, etc.) that requires immediate action?action?


Acknowledge receipt of complaint to Acknowledge receipt of complaint to complainantcomplainant

Send target letter to the home office of the Send target letter to the home office of the broker dealerbroker dealer What documents do you want to ask for? Make What documents do you want to ask for? Make

request reasonable, yet adequate to address request reasonable, yet adequate to address concerns. Consult your agency’s policy on whether to concerns. Consult your agency’s policy on whether to include a copy of the complaint.include a copy of the complaint.


Do you want an affidavit or statement from: Do you want an affidavit or statement from: agent, manager, compliance officer, sales agent, manager, compliance officer, sales assistant, trader, etc.assistant, trader, etc.

If records are not voluntarily provided via If records are not voluntarily provided via target letter you may wish to consider, if target letter you may wish to consider, if feasible, a visit to the agent’s office or the use feasible, a visit to the agent’s office or the use of a subpoena.of a subpoena.


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


Review all information received.Review all information received. Is target’s response adequate?Is target’s response adequate? Does complainant need to confirm/deny Does complainant need to confirm/deny

anything in target’s response?anything in target’s response? Do other parties need to confirm any Do other parties need to confirm any

information?information?


Evaluate the target on a continual basisEvaluate the target on a continual basis Are they being cooperative? Do the Are they being cooperative? Do the

documents support their claims? Are they documents support their claims? Are they hesitant to release information?hesitant to release information?

If issues are complicated or the responses If issues are complicated or the responses don’t seem truthful, you may want to consider don’t seem truthful, you may want to consider taking the target’s on-the-record testimony.taking the target’s on-the-record testimony.

What is/are their defense(s)?What is/are their defense(s)?


Evaluate the complainant on a continual Evaluate the complainant on a continual basisbasis Are they being open and cooperative?Are they being open and cooperative? Would they be willing to testify if the case Would they be willing to testify if the case

went to hearing? If so, evaluate their ability to went to hearing? If so, evaluate their ability to be an effective witness i.e. if their story be an effective witness i.e. if their story remains consistent, if they have health issues remains consistent, if they have health issues such as memory loss. If not, can you proceed such as memory loss. If not, can you proceed with the case without their testimony?with the case without their testimony?


Evaluation of the complaintEvaluation of the complaint If no violations, send closeout letter. As the If no violations, send closeout letter. As the

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

CUSTOMER COMPLANITSCUSTOMER COMPLANITS

For example: Documentation not in For example: Documentation not in the possession of your agency, i.e. the possession of your agency, i.e.

testimony, may be available to you testimony, may be available to you but but may be taken or provided during an may be taken or provided during an arbitration hearing.arbitration hearing.


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


If violations are present, discuss the case with If violations are present, discuss the case with your supervisor or an attorney to determine your supervisor or an attorney to determine the best course of action to resolve the the best course of action to resolve the complaint (i.e., de minimis violation letter, complaint (i.e., de minimis violation letter, letter of caution, administrative actions, etc.)letter of caution, administrative actions, etc.)

If administrative action is warranted, be sure If administrative action is warranted, be sure you have documented the violations via you have documented the violations via documents and testimony.documents and testimony.

COSTUMER COMPLAINTSCOSTUMER COMPLAINTS

Other ConsiderationsOther Considerations Unlike many other financial deals which are done Unlike many other financial deals which are done

pursuant to a written contract, securities transactions pursuant to a written contract, securities transactions are, for the most part, done orally. Therefore, absent are, for the most part, done orally. Therefore, absent any other corroborating evidence, you may encounter any other corroborating evidence, you may encounter a “he said-she said” situation.a “he said-she said” situation.

If your review has documented a violation, was there If your review has documented a violation, was there a failure to supervise on the part of the a failure to supervise on the part of the supervisor/firm? If so, document appropriately.supervisor/firm? If so, document appropriately.

If you are unable to document a violation, maintain If you are unable to document a violation, maintain the information in some form of database in the event the information in some form of database in the event future complaints are received.future complaints are received.


Important RemindersImportant Reminders Be sure to look for additional violations even though Be sure to look for additional violations even though

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


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

CUSTOMER COMPLAINTS. Review the Complaint Is the complaint within the jurisdiction of your agency?...

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