13 Nov 2018

How To Win The Compliance Game of “Simon Says”

Definition of compliance
1a: the act or process of complying to a desire, demand, proposal, or regimen or to coercion
1b: the things you have to do to make sure you’re on the up-and-up when it comes to messaging your customers

Real talk here: dealing with all the red tape and rules that come with this industry can make you feel like you’re playing a game. A not-so-fun-game where if you make one misstep, you’re out – or hit with a bunch of fines and slaps on the hand.

Look, we all make mistakes. In fact, mistakes are how we learn and grow (thanks for that advice, Dad!). But when it comes to business – especially financial business – mistakes, no matter how honest they are, can cost beaucoup bucks for you and your company. And nowhere are mistakes made more than in the digital marketing sector, particularly when it comes to website compliance.

If those words just made you shudder a little, don’t feel bad. Website compliance is the DUM DUM DUUUUUUM of the financial world because it’s still a relatively new space (when you look at the long history of the industry), and lots of mistakes have been made in the past. But since there have been so many mistakes made, you have so many examples of what you shouldn’t (and should instead) be doing.

To be a darn-near masters of the Simon Says-esque rules of website compliance, here are the top four things to hit in order to win the website compliance game.

1. Simon Says: “Define the Advertisement Terms!”

No one likes to have the wool pulled over their eyes, and people really don’t like it when they’re promised one thing, only to find out that the fine print says something completely different. Know who hates it even more? Compliance watch dogs. This is the Regulation Z factor, also known as Truth in Lending. It’s also the most common and frequently recurring mistake that can affect website compliance. Here are some of the two biggies:

  • Unsubstantiated claims (“We can definitely reduce your monthly payment!”)
  • Teaser rates that don’t include required, additional disclosures

Basically, your website needs to be given the same level of scrutiny as your print advertising. Look over everything to make sure everything’s above board – and if there’s any doubt, err on the side of “too much” disclosure rather than “not enough.”

2. Simon Says: “Define the term APY!”

As you know, there are several ways of looking at interest rates. There’s APR, which is the annual rate of interest and the number that most customers think of. It also happens to be the number that is highlighted the most in any sort of lending information.  Which is why it’s so incredibly important to define APY in conjunction with the APR. APY takes into account how often interest is applied which results in intra-year compounding, and can be considered the “true” interest rate for a customer. APY can add anywhere from an eighth of a point to a full point onto a tallied interest rate, and can leave customers scratching their heads or shouting “YOU LIED” when they do the math on their payments.

Fortunately, being compliant in this instance is so simple it’s almost laughable. Any time you use the acronym APY on your website, be sure to accompany it with the definition of “annual percentage yield.” This can be as simple as attaching an asterisk next to the acronym with the definition at the bottom of the page.

3. Simon Says: “Display application disclosures appropriately!”

We already said it, and we’ll say it again: When in doubt, disclose! Right now, we’re specifically talking about disclosures during online applications. At appropriate times during the process, it’s smart to disclose terms, conditions and whatever else, along with a checkbox that the user has to click saying that they’ve read and agreed with everything. Think of it as the online version of the “sign here – sign here – sign here” process you do in person.

This is an area where those attorneys you hire, earn their keep. Let’s say your online application simply isn’t built to handle this type of interactive disclosure. Your lawyer can tell you if the best fix is having customers begin their applications online but finish it (i.e. sign, cross t’s and dot i’s, etc.) in person at a branch or if you have the appropriate disclosures and forms to handle the work all online.

4. Simon Says: “Make sure the legalese is large enough to see!”

We get it: sometimes that legal stuff doesn’t look real pretty on your beautifully designed web page. It’s tempting to shove them down to the corners of your website and make them delicately tiny, but Simon Says that these logos need to be visible and readable to the average person. It’s not pretty, but it will keep you from dealing with a pretty big mess.

We know that understanding what Simon is Saying is time consuming and slightly boring.  Website compliance isn’t a super sexy topic, but it is vital for you to understand so you can spend less time cutting through red tape and more time doing what you do best – taking care of your customers.

We want to be your caddy as you take care of your customers. We send the right message to the right at the right time, AND we’re now doing it through three new channels; texting, digital marketing and direct mail. Reach out and let’s see what those additional channels could do for your lead volume.

Information taken from https://www.affirmx.com/five-common-website-compliance-mistakes-avoid/