The COVID-19 pandemic, and the economic volatility and
uncertainty it has created, has heightened the attention placed on
consumer protection in litigation and regulatory activity involving
financial institutions (FIs). The economic impact of the pandemic
has also increased the risk of corporate misconduct due to
conflicts of interest and other business practices that do not put
customer's interests first. These areas are a source of
litigation and regulatory enforcement action.
To address this changed reality, FIs should proactively mitigate
risks in the following areas.
1. Consumer protection-based litigation and complaints on the
rise
A recent increase in consumer protection focused class actions
and other litigation have included claims of alleged over-payment
of investment fund fees, improper denial of insurance coverage
associated with cancelled travel or non-delivery of services due to
COVID-19, and investor claims for aborted M&A transactions
which would
