Two weeks ago, we reported on an article published by the American Banker, which alleged certain inaccuracies and flawed practices in the CFPB’s consumer complaint database, citing several current and former employees of the Bureau. This week, CFPB Director Richard Cordray wrote a sharp rebuke of the American Banker’s article, claiming that it was “riddled with inaccuracies about the database and how it works.”
The Director addressed some of the more specific criticisms directly. He defended the practice of creating a separate complaint for each of the companies named in the consumer’s narrative, emphasizing that companies may confirm or deny a customer relationship. He argues that this practice provides a simple means of allowing consumers to identify all potential sources of their disputes. Director Cordray also minimized the importance attached by the American Banker to misreporting the consumer’s name, arguing that because this information is withheld, it does not impact the database’s accuracy.
Director Cordray also highlighted a recent OIG report, characterizing it as having identified minimal inaccuracies in the public database.
The American Banker, commenting on the Director’s response, pointed out that he did not address the statements of former CFPB employees and that he confirmed some of the American Banker’s reporting regarding the duplication of complaints. The original American Banker article also took issue with what it claims are complaints misdirected to companies and the misidentification of some consumers, which it says were likewise confirmed by the Director’s remarks.
The Director’s response to the American Banker article seems to reflect a growing frustration with criticism leveled at the consumer complaint database. Unlike the interim Assistant Director of Consumer Response’s open letter responding to the OIG report, which emphasized efforts to continue improving the quality of consumer complaint data, the Director’s comments staunchly defend past and current practices.
Although the Director rightly points out that the individual examples highlighted by the article are likely of little consequence on their own, his responses do not fully grapple with the heart of the criticisms being leveled against certain policies. Companies are concerned that a system that errs on the side of duplicative complaints will result in unfair attribution and gamesmanship. And while misidentification of the consumer may matter little to the overall accuracy of information in the database, it matters a great deal when the company cannot properly respond to the complaint and the consumer receives an unsatisfactory response. The consumer may then opt to dispute the company’s response, a choice which is reflected in the public database and acts to stigmatize the company. Nor is it entirely clear how a company receiving a complaint that incorrectly identifies the consumer should address the issue of whether to “confirm a commercial relationship” with the complainant.
Companies want a system that will reward them for good customer service and compliance with consumer protection regulations. The Bureau can continue to make changes to the database that will remove the incentives for consumers to repeat identical complaints and that will reflect the efforts of responsive companies.