Deadline Looms for Public to Weigh In on Consumer Complaint Database

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Should consumers, businesses, and others be able to read complaints people have shared about financial services companies? If you have an opinion, you have until Monday to make your view known to officials at the Consumer Financial Protection Bureau.

The bureau, which runs the Consumer Complaint Database, says it will use those comments to help determine changes to the database, including whether to keep its commentary portion, where consumers describe their complaints, available for public view.

Of the few comments that have been left so far, more are in favor of keeping the database open to the public than shutting it off from view.

“I believe the collection and investigation of such complaints to be a worthwhile effort on behalf of the American consumer,” wrote Tom Wiltshire, vice president of Key Title, a settlement service provider based in Reston, Va. 

“Consumers are able to see that there are others that have had similar problems, and it gives companies an important tool to see systemic problems that they might not be internally aware of right away,” noted Christopher Mertens, a consumer rights and student loan attorney based in Portland, Ore. “It further allows those who assist consumers to ensure that companies are held accountable for their bad behavior and helps victims be made whole from harm caused by abusive actions.”

Of those who criticized the database, few recommended eliminating the public’s ability to see it. But they did have ideas for improving it.

Alan Bartlett, compliance officer with Credit Control Corp. in Newport News, Va., suggested requiring consumers to leave more information about their accounts so that businesses could better identify them and respond. 

Kenlyn Gretz, CEO of Americollect, a debt collection service in Manitowoc, Wis., mentioned that few of the customers complaining about his company to the CFPB had complained to his company first. “Only 16 percent of the consumers previously contacted us,” he wrote. “The portal should require consumers to work with the creditor prior to filing a complaint.”

25,000 Complaints Each Month

Since the database went live in late 2012, consumers have been able to report their complaints and get a company response, and in some instances redress. About 25,000 complaints are filed each month from consumers about their dealings with banks, credit card issuers, mortgage lenders, student loan servicers, and other financial products and services.

When a complaint is filed by a consumer, the CFPB alerts financial institutions to the complaint and the company must provide a response to the consumer through the database, usually within 15 days. The CFPB logs the complaints in the database showing not only the name of the company the consumer is complaining about but also how quickly the company responded and whether the consumer was satisfied with the resolution. 

The CFPB says restitution from database complaints has contributed to its providing nearly $12 billion in relief to 29 million aggrieved consumers in the past five years.

CR’s Consumer Voices survey shows that Americans have concerns about the accountability of the banking industry. Almost two-thirds of respondents said they are either only slightly or not at all confident that banks and investment companies are acting transparently and responsibly to charge reasonable fees and protect their investments.

Ongoing Controversy

The CFPB opened the database up for public view a couple of years ago. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which founded the CFPB, requires the bureau to collect consumer complaints and to respond to those complaints. But it does not require them to be viewed by the public. 

CFPB Acting Director Mick Mulvaney, who says he has been running the CFPB by the letter of the law—and no further—has been vocal about his interest in closing off pubic viewing of the database. 

“I don’t see anything in [the law] that says I have to run a Yelp for financial services sponsored by the federal government,” he told bankers at an industry conference in April. “I don’t see anything in here that says that I have to make all of those public.”

Individuals familiar with its workings say the database has provided useful information and assistance not only to consumers but also to businesses. But some lenders have been critical of the database, which can shed an unflattering light on their practices. 

Banks and other financial institutions have expressed concern that it allows consumers to report complaints anonymously and that the CFPB doesn’t fully vet the complaints for accuracy. 

“We have long objected to the public disclosure of unverified consumer complaints and repeatedly called on the bureau to make improvements,” says John Mechem, vice president of public affairs for the Mortgage Bankers Association.

Ruth Susswein, deputy director of national priorities for Consumer Action, an advocacy group based Washington, D.C., defended the way the database works.

“A company has every right to come back and say, ‘That’s not what happened,’” she says. Susswein noted that in many cases, consumers resort to complaining to the CFPB when they’ve exhausted their efforts working directly with companies. “This may be their last, best hope for resolution,” she says. “It’s an effective and unique first-class complaint system.”

A Tool for Businesses

Consumers are not the only beneficiaries of the database. Steven Ramirez, CEO of Beyond the Arc, a consumer-experience consulting firm based in Berkeley, Calif., says his company has mined it for insights to present to financial industry clients.

“It can be useful to financial services companies because it is the one source of data that is comparative across institutions,” he says. Ramirez says that businesses can see complaints filed against other companies as well and that by reviewing the complaints a business can better understand its strengths and weaknesses.

“I feared the cost of compliance and the risk of not knowing how to comply,” Wiltshire wrote in his comments to the bureau. “As time passed, I have merged compliance into our business practices and the result has been a better business environment for me and the consumers I serve.”

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