CFPB Begins Naming Names in Complaints Against Credit Card Issuers
The Consumer Financial Protection Bureau today has unveiled its online database of consumer complaints against credit card companies — and the financial industry is taking it about as well as you’d expect.
“While our industry stands ready to work with the CFPB to resolve customer concerns, the Bureau’s plan to release unverified data is disappointing and could mislead consumers,” the American Bankers Association wrote in a statement released today.
The unverfied nature of complaints filed with the FTC and the CFPB is old news to the collection industry. Every year the FTC publishes its Consumer Sentinel Network Data Book, and every year collection agenices come in second — after identity theft — in the race for Most Complained About. (Another adorable quote from the ABA press release: “The Bureau itself acknowledges the complaints could be inaccurate, and in fact plans to disclaim their accuracy. This makes the proposed database a questionable – even misleading – resource and risks tarnishing the reputation of individual companies without substantiation.” Aw! You don’t say?)
The FTC is upfront about their data. On page 2 of 2011′s Data Book, the FTC writes, “The 2011 Consumer Sentinel Network Data Book is based on unverified complaints reported by consumers.” As the FTC has stated that the data it collects has never been intended for complaints resolution. Instead, the complaints data they collect is primarily used by law enforcement “to enhance and coordinate investigations.”
Ho
wever, the CFPB looks to be positioning itself as a complaints mediator, adding a resolution component to its process.
This story on MSNBC.com gives a little more background on the CFPB’s database project:
- Website users can see the name of the company targeted by each complaint, the nature of the issue, the company response — including timeliness — and the zip code of the complainer
- Users can also generate charts showing which banks attract the most complaints, which issues are hardest to resolve and which regions of the country seem most irritating by bank practices
- The website includes only a small fraction of the 17,000 complaints filed regarding credit cards since July of the last year
- Only complaints filed since June 1 will be available at first, as the agency works out the kinks in its “beta” launch of the database
- Complaints about mortgages and checking accounts will also be added later
There is perhaps some cause for alarm at how the reports the database can generate are being characterized. While timeliness is certainly something that can be effectively measured — irritating banking practices? That seems nebulous, and certainly not a field one can plug into an Excel workbook.
Since the CFPB has plans to oversee the collection industry, it’s almost a guarantee at this point that, perhaps within the year, the CFPB will also publish consumer complaints in a similar database.
I have a suggestion. Instead of automatically defending the industry and assuming all data will be negative to the whole. Why not work hand in hand with them. The more points of data collected the better the analysis can be on both sides. I am constantly disappointed by the reports that come out in that there are a lot of key points of data missing and key stakeholders not included. I would be more than happy to offer up my skills and resources in analyzing data received by Inside Arm or the CFPB database or FTC data to have fair and accurate analysis. I have Minitab on my laptop and probably some better Six Sigma tools than the average analyst that could provide better insight for all and allow the data to be utilized for solutions to help all sides of the industry as well as regulators. There is always a difference in the presentation when you have an understanding of the systems and processes.
honest question here: would banks or collections folks prefer a VERIFIED complaint system, in which cfpb hires bunches of regulators and supervisees must permanently divert firm resources to help facilitate near-constant investigation, or an unverified complaint system where you are annoyed but generally free to carry on business as usual?
@Keaton:
This IS what’s happening with credit cards and the CFPB as of today.
I think that’s actually the direction the CFPB is going with collection agencies in the future. From interviews we’ve had with the players, it sounds like the CFPB is moving to a Better Business Bureau model where agencies would have to respond to consumer complaints.
What that means, how that would be accomplished, and what defines a “resolved complaint” are, I believe, still being ironed out. But: it’s coming.
The vast majority of consumer complaints we are required to respond to are either lacking in facts that constitute a violation (e.g. ” they wouldn’t accept my $50/mo payments on my $10k debt” or “I didn’t know I’d be responsible for interest” etc.) or arise from a misunderstanding of what can and cannot be done during the collection process (many times due to misinformation on the Internet). Perhaps – and I’m being optimistic – after reviewing the complaints and responses for a year or so the CFPB will be able to compile enough data to conclude that the vast majority of the “complaints” received each year don’t really constitute valid complaints against the collection industry and the depth of the “problem” is not as initially believed.