Today, the Consumer Financial Protection Bureau launched its Consumer Complaint Database, which allows the public to view consumer complaints filed against credit card issuers. The Bureau also announced that it is submitting a request to the Federal Register seeking comments on extending the database to include other financial products in addition to credit cards – any such comments are due by July 19, 2012. We, along with others in the industry, are disappointed by the Bureau’s decision to publicly release unverified and unrepresentative complaint data, along with the identities of the companies subject to those complaints.
Currently, the database houses the complaints filed since June 1, 2012 but the Bureau plans to add the complaints filed before June 1 later this year – to date, the Bureau has received over 17,000 credit card complaints. The publicly-available information in the database includes the type of complaint made by the consumer, the date of the submission, the consumer’s zip code, and the company the complaint concerns. It also shows any actions taken by the company on a complaint, including whether the company’s response was timely, how the company responded, and whether the consumer disputed the company’s response.
Responding to comments from both consumer and industry representatives, the CFPB broadened the response categories of “closed with relief” and “closed without relief” to the following four categories: “closed with monetary relief,” “closed with non-monetary relief,” “closed with an explanation” and simply “closed.” Previously, the “closed with relief” category could be used only if the company provided objective and verifiable monetary relief to the consumer that is measurable in dollars. The narrow scope of such category lead to criticism that the “closed without relief” category did not appropriately reflect when other forms of relief were provided, or when no relief was appropriate. The “closed with non-monetary relief” category may be used when objective and verifiable relief is provided that does not meet the standard for “closed with monetary relief.”
Closing a complaint with non-monetary relief could include things like changing account terms, correcting submissions to a credit bureau, or coming up with an alternative that doesn’t have direct monetary value to the consumer – however, there does not appear to be any way to account for the actual non-monetary relief in the database. Closing a complaint with explanation means the company provides an explanation to the consumer that substantively meets the consumer’s desired resolution or explains why no further action will be taken. The database prioritizes for review and investigation complaints in which a consumer disputes the company’s response or a company fails to provide a timely response. The database will be updated daily with any new complaints.
In connection with this release, Richard Cordray stated that “[e]ach and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight.” According to Mr. Cordray, “[t]he information helps us and it should be available to help others too. By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market.” However, just because the Bureau may claim to receive such insight from this data, that does not necessarily mean any such benefits are readily transferred to the public. And as we previously blogged, releasing this kind of unverified and unrepresentative data presents a host of problems and hardly achieves Mr. Cordray’s stated objectives. Already, the ABA and others have expressed disappointment about the Bureau’s decision to release the identities of the companies subject to the complaints and other information contained in the database, particularly in light of the reputational risks inherent in such disclosures.
Moreover, given the Bureau’s prior statement that it hopes consumer groups and academics will use the database information to look for trends and patterns, it is hardly appropriate to draw any conclusions (or enact any related regulations) based upon a data set that is demonstrably unreliable and unrepresentative, and which reflects the views of only the consumers who chose to complain – instead of those who may be perfectly happy with their financial products. Instead, as previously urged by the ABA, the appropriate type of data upon which to base any such research, at least according to generally-accepted methods of statistical analysis, is aggregate market-level complaint data that is more representative and reliable than the data included in the database. With its decision today, the Bureau seems to be signaling that it will weigh the views of people who choose to complain more than those who may be satisfied in making policy decisions, and it seems to be urging the public to take the same incomplete view.