Channel | Compliance

How to Handle Consumer Complaints

By: Terry O'Loughlin

How to Handle Consumer Complaints

In my years at the Florida Attorney General’s Office I would spend a great amount of time on the telephone. Consumers would often call the Attorney General’s Office, from across the state, and wish to discuss a complaint they had against a car dealer. All those many calls would usually be forwarded to me and they numbered in the thousands. Consumers would then proceed to regale me with their stories of woe and demand action. I would always attempt to be sympathetic but would ask a series of questions to determine whether it was a valid complaint and one that the Attorney General’s Office could redress. I also quickly identified the fact that consumers weren’t always completely honest with me as they shaded the truth. If I determined that the consumer didn’t have a valid complaint I would tell him so, which was quite often: the dealer did nothing wrong. Those consumers didn’t like my responses and often thought that I was a shill for the industry. In fact, more than one consumer reported me because I told him that the Florida Attorney General wouldn’t take action. If I determined that a consumer had a valid complaint, however, I would ask him to sign an affidavit and then request the deal jacket from the dealer. This is where the recommendation of this column begins: how to address consumer complaints effectively, preferably before they are filed with the Attorney General, without spending a lot of money doing it.

The CFPB and Consumer Complaints

The CFPB (and every other government agency which polices consumer law) is keenly interested in consumer complaints. On its website the CFPB encourages consumers to file their complaints as they related to financing sources:

Recently, a spokesman for the CFPB recommended that dealers should also monitor websites where consumer complaints are registered such as and The CFPB also recommends including a complaint protocol for all complaints companies receive as part of their Compliance Management System (CMS), indicated below, which the CFPB is now requiring.

Dealers should implement a CMS as it makes good business sense. Once again, however, franchise dealers are not under the CFPB’s direct supervision. But the idea of a CMS relates to legal obligations dealers presently have due to the Safeguards and Red Flags Rules which necessitates that all dealers must implement these two programs and appoint a compliance officer. Dealers should build upon this concept and establish a permanent CMS. Since it is highly likely that compliance requirements will continue to increase and be demanded of dealers, creating a long-term solution for these compliance demands, is quite prudent. A CMS would be that solution. A CMS program would include the following:

  1. Establish a compliance program
  2. Establish a board with management oversight
  3. Appoint a permanent compliance officer who reports to that board
  4. Respond to consumer complaints with a protocol
  5. Have routine audits examining how the program is functioning and can be improved.

The Benefits of a Complaint Process

As mentioned above, when I received a valid complaint I would request the deal jacket from the dealer. The request would usually be sent to the General Manager. In the great majority of cases, the General Manager would express surprise at receiving this complaint but would cooperate by sending the deal jacket without studying it. What the General Manager didn’t understand was that the consumer had already complained to the salesman or the F&I Manager at the dealership several times without garnering any satisfaction. The reason was that the salesman and/or F&I Manager were the reason for the consumer’s dissatisfaction and they didn’t want to address the problem since they had been dishonest with the consumer in the transaction. The many consumer complaints I reviewed had this consistent theme. Consumers reported to me that they had contacted the dealership repeatedly to complain but no one tried to resolve the issue. In fact, the dealership employees, who caused the problem, were actually trying to hide it from upper management and hoped that these consumers would simply get tired of complaining. A good consumer complaint protocol would have short-circuited this problem by alerting the General Manager to the problem so that it could be addressed after the first consumer complaint was filed and the Attorney General would never hear of it.

These types of complaints are invidious. They can cascade into a full investigation by the Attorney General. But this result can readily be avoided by a consumer complaint protocol.

How to Manage Consumer Complaints from the Attorney General or any other Government Agency

Depending upon a dealer’s budget, and whether it retains a competent attorney, will determine, if and when, any complaints are sent to the dealer’s attorney for resolution. Many complaints can be resolved without the assistance of legal counsel in my personal experience. If the complaint is a serious one, the dealer should involve his attorney. However, I would never dissuade a dealer from consulting with his attorney at any time regarding any consumer complaint.

In preparation for complaints from government agencies dealers should implement the following:

  • Establish a dedicated telephone line that can only be accessed by the store’s Compliance Officer or General Manager. If a consumer calls the dealer with a complaint the receptionist should be instructed to transfer it to this dedicated line. The website should have a similar function.
  • Any written complaints sent to the store should be immediately transferred to the Compliance Officer or General Manager. Salesmen, F&I Managers, or even the Sales Manager, should not be able to review these complaints.
  • To avoid any misunderstanding with consumers, dealers should be certain that their documents are properly prepared and easy to understand. Dealers should also use a Deal Summary form which summarizes the entire transaction.
  • If a dealer receives a consumer complaint from an agency the dealer should diplomatically inquire about the complaint with the requesting agency, always promising to cooperate.
  • Dealers should request the underlying written complaint from the agency. Written complaints by consumers are generally considered public records and agencies must provide them.
  • Dealers should internally study the deal jacket to determine if there is any validity to the complaint before providing any documentation.
  • Dealers should initiate an internal investigation and discuss the issue with the salesman and F&I Manager to determine the history of the matter. Have the salesman and/or F&I Manager attempted to hide this problem? If so, they should be disciplined.
  • Is this complaint representative of other complaints received by the dealer or could it be symptomatic of a “pattern or practice” of any salesmen or F&I Managers?
  • If the dealer identifies a serious violation of law in the transaction (e.g., deception, fraud, or a pattern or practice) the dealer should involve his attorney in the matter. The deal jacket should still be provided to the requesting agency but the dealer’s attorney may request a subpoena for its production. The dealer may wish to offer a resolution to this problem before the deal jacket is produced with a full explanation.
  • If the dealer identifies a minor problem, such as a misunderstanding, the deal jacket should still be provided to the requesting agency. The dealer may wish to offer a resolution to this problem, as well, before the deal jacket is produced with a full explanation. Even if the dealer isn’t at fault it may be prudent to offer a solution benefitting the consumer for the misunderstanding.
  • Dealers should also be monitoring the many places where complaints are filed such as websites, social media, and government agencies.

The central point to be made in handling consumer complaints is have an executive at the store review the problem and solve it before it becomes a larger problem. Dealers should try to avoid any publicity or other requests from government agencies by resolving consumer complaints quickly.


There are several technology providers that offer software applications to the dealer management system that can be used to monitor and resolve consumer issues of any kind. Some of these programs are highly effective.

There are also on-line websites that will forward consumer complaints to the dealer once they are filed.

The benefit of technology is that it simplifies various processes and increases efficiency.


As with utilizing arbitration, dealers can protect themselves from needless liability by having a process for identifying and redressing consumer complaints. A good consumer complaint protocol can be effective without incurring great effort or expense. Dealers should endeavor to resolve all complaints before they are filed with governmental authorities or attract the attention of a consumer attorney. It is far cheaper.

This article was written by:

- has written 24 posts on P&A Magazine.

Terry O'Loughlin is the director of compliance for Reynolds & Reynolds. Prior to joining Reynolds in 2006, he was employed by the Office of the Attorney General, State of Florida, from 1990, in the Economic Crimes Section. For most of those years he was involved in the investigation and prosecution of automobile dealers, manufacturers and finance and leasing companies. He was also the mediator of Florida’s Motor Vehicle Lease Disclosure Act, a statute that he assisted in drafting. He has served as a consultant to the Federal Reserve Board’s Leasing Education Committee, an observer/advisor for the Uniform Consumer Leases Act Committee, and has been a consultant to “PrimeTime Live,” “Dateline” and various other media and publications. In addition, Terry routinely assisted numerous states agencies nationally regarding motor vehicle fraud. In 2010, he was elected to the Governing Committee of the Conference on Consumer Finance Law.

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The views expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views of P&A Magazine or any employee thereof.

One Response to “How to Handle Consumer Complaints”

  1. Thomas Scanlon says:

    Mr. O’Loughlin: I recently read your article. As a former General Counsel to a nationwide Vehicle service Contract Administrator that partnered with car dealerships, I agree wholeheartedly on your suggestions. Most business complaints can be resolved by taking them serious and submitting a response. The businesses that ignore them get in trouble.


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