The CFPB has issued a complaint report which it describes as “the first in a new series of monthly reports to highlight key trends from consumer complaints submitted to the Bureau.” In addition to providing overall data on complaint volume, each monthly report will spotlight a particular product and geographic location. The July 2015 report spotlights debt collection complaints and complaints from consumers in Milwaukee, Wisconsin.
As described by the CFPB, the monthly reports will use “a three-month rolling average, comparing the current average to the same period in the prior year where appropriate, to account for monthly and seasonal fluctuations.” In some cases, it will use “month-to-month comparisons to highlight more immediate trends” and, for company-level complaint data, it will use” a three-month rolling average of complaints sent to companies for response.” The CFPB states that the company-level complaint data “lags other complaint data in this report by two months to reflect the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer.”
The section of the July 2015 report on complaint volume displays information by product, state and company. With regard to company data, it identifies the “top 10 most-complained-about companies.” The section on debt collection complaints displays information by type, state and company. In addition to identifying the top 20 “most-complained-about companies for debt collection,” the company data identifies the five companies with the “largest percent increase in debt collection complaints,” the five companies with the largest percent decrease in debt collection complaints,” the five companies with the “highest rate of untimely responses to debt collection complaints,” and the five companies with the “lowest rate of untimely responses to debt collection complaints sorted by the most timely responses.”
In the section spotlighting Milwaukee complaints, the CFPB displays information showing complaints by product, volume trend over time, and company, identifying the ten “most-complained-about companies by Milwaukee consumers.” The report also includes an appendix showing total complaints by month and product from July 2011 through June 2015, by state and product, and by the 30 “most-complained- about companies for debt collection” in comparable periods.
In its press release, the CFPB claims that “the reports will provide insight for the public into the hundreds of thousands of consumer complaints on financial products and services handled by the CFPB.” In reality, without any normalization of the data that allows consumers to make meaningful comparisons, the CFPB’s lists of top “most-complained-about companies” can only serve to mislead consumers. For example, larger companies may have more complaints simply because they have many more customers, not because their practices are more deserving of criticism. The CFPB has recognized that lack of normalization is a problem, requesting “feedback on best practices for “normalizing” the raw complaint data it makes available via the Database so they are easier for the public to use and understand.” Comments on normalization are due by August 31, 2015.
Even if the CFPB addresses the normalization issue, however, the monthly reports still can mislead consumers by failing to disclose that the CFPB has not vetted any of the complaints, let alone excluded complaints that have no basis in fact. The CFPB refers to complaints as “submissions that express dissatisfaction with, or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer’s personal experience with a financial product or service.” As we have often observed, however, many complaints arise not from wrongful company conduct, but rather from attempts to gain leverage over a company or simply from personal economic frustration. If future monthly reports include excerpts of complaint narratives, the unfairness of the complaint portal will be magnified even further.