Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—New York State DFS issues guidelines for consumer crypto complaints, (May 31, 2024)

By Nora Macaluso

Virtual currency companies are required to keep records of customer requests and complaints and report them to the department quarterly.

The New York State Department of Financial Services (DFS) issued guidance for the virtual currency entities (VCEs) it regulates, requiring them to maintain and implement policies and procedures to address customer service requests and consumer complaints. “Consumers have a right to a transparent and timely process for resolving complaints and answering questions, irrespective of the company or product in question,” said DFS Superintendent Adrienne Harris. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business.”

The guidance requires licensed VCEs to collect and maintain records of their policies and procedures, and to do a quarterly analysis of requests and complaints they receive. The department said it will assess how companies doing and the efficacy of their policies and procedures through examinations and supervisory monitoring.

Effective policies and procedures, according to DFS, include:

• Providing customers with phone and electronic text mechanisms to submit requests and complaints. The department said it expects a customer service phone number to be “clearly and conspicuously stated” on the VCE’s website and mobile app, and the phone line and electronic text function to be “monitored by human customer service representatives.”

• Providing customers with regular updates and estimated resolution timelines, along with explanations for outcomes that may be less than a customer sought. If an artificial intelligence tool is used to communicate with customers, that should be made clear. Customers should also be able to “escalate” AI interactions to a human representative.

• Publishing an FAQ or similar communication without requiring an account to log in. FAQs should include information including business hours, methods for making customer service requests and complaints, and directions on how to submit complaints directly to DFS.

• Tracking requests, complaints, and customer satisfaction feedback.

• Reporting quarterly on the number of requests and complaints received, broken down by method and topic, and including the average time from receipt to resolution.

Reports on customer service requests and complaints must be provided during examinations or at the department’s request. Copies of an organization’s customer service and complaint policies and procedures must be available by Nov. 1. Companies should also specify the individual or individuals responsible for these policies and procedures.

The department said its guidance was informed by “in-depth research” and meetings with “key stakeholders.”

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