UDAAP, or the Unfair, Deceptive, Abusive Acts or Practices policy, was put in place to protect customers from being unwittingly harmed by misleading or overtly deceitful actions by financial institutions. Often there is a misconception that UDAAP and regulatory regulations at large are the sole responsibility of the risk manager, and that can lead to miscommunications that inadvertently trickle down to the customer. Marketing and advertising is an area where there needs to be close collaboration between the risk management department and the marketing department to ensure these issues aren’t occurring, and that everyone understands their role in adhering to UDAAP regulations. Here are a couple best practices that can assist in making sure your marketing tactics are on the up-and-up:
Don’t Hide in the Fine Print
Those asterisks can help your marketing team craft an ad that really pops – but it shouldn’t be at the expense of your clients. If the fine print it too fine, it can be difficult to see and can be easily overlooked. Make sure all advertisements give the appropriate message in the large print, and all clarifying statements at the bottom of the ad are easily found and read.
Make Sure It’s Really ‘Free’
Marketers love to offer things for free. It’s exciting! It’s enticing! It also needs to be true. If your institution is offering a “free” checking account, it should not have any associated fees, service charges, or any other added cost. If it does, it isn’t free, and should not be marketed as such.
Review the Content
It is important to have a hand in the content that is going out to consumers to be sure that your institution is not accidentally misleading in your promotion. Ask for a review of marketing content before it is released. It would also do you and your organization well to train your marketing team on UDAAP so they understand how they play a part in adhering to these regulations. Changing the perception that the risk manager is the only person responsible for compliance will strengthen your marketing team, and will give you a stronger risk culture within your organization.
Looking for more information about UDAAP? Cynthia Boehmer, Compliance Supervisor for WolfPAC will be speaking at the California Bankers Association’s 38th Annual Regulatory Compliance Conference. Her session, UDAAP Hot Topics (and don’t forget those vendors!) will dig deeper into the pitfalls and best practices of marketing and advertising while adhering to UDAAP policies. She will also speak about properly monitoring vendors in relation to UDAAP, and will pull in examples that she sees through client work and regulatory commentary. The event will be held on October 4th at the Omni Rancho Las Palmas Resort. For more information about the event, head over to our Regulatory Compliance Conference event page!
If you can’t make it to the event but still have some burning UDAAP questions, feel free to contact us, and our experts will be able to give you some of our insights!