Consumers have won a big victory in favor of transparency for a change.
The Consumer Financial Protection Bureau has decided it won’t remove from public view a complaint database that consumers use to ask for help in resolving financial issues, such as problems with a debt collector, mortgage lender or student loan servicer.
For example, if you’ve tried but failed to get a credit bureau to remove erroneous information from your credit file, you’re almost certain to get a response if you submit a complaint to the CFPB.
This isn’t the typical “complaint box” where grievances go to die.
Since launching the database, the bureau has handled 1.9 million complaints and forwarded more than 1.3 million to companies for a reply, CFPB Director Kathleen Kraninger said during a recent speech at the National Consumer Empowerment Conference. More than 5,000 companies have responded to 97% of consumers filing a complaint, she said.
In fact, the U.S. PIRG Education Fund, a nonpartisan consumer-advocacy group, analyzed complaints made through the CFPB and found that more than 223,000 grievances resulted in relief for consumers. More than 75,000 people got money back from the companies they complained about, according to the report released earlier this year.
“The database opens a window onto the marketplace,” said Ed Mierzwinski, U.S. PIRG senior director for Federal Consumer Programs. “There is no perfect way to study the financial industry. We need this window open.”
But as you might imagine, the companies being complained about don’t like the complaint database being public.
They argue that people are only getting one side of the story and that the complaints might not be accurate. It should be noted that the Bureau also gives companies the option to post a public response.
“Since its inception, the Consumer Complaint Database has not been without controversy,” Kraninger said in a statement about the changes.
Mick Mulvaney, the former interim head of the CFPB and now acting White House chief of staff, didn’t want to keep the database public despite the fact that the bureau is required to provide certain information to Congress about complaints and responses. In referring to the rule Mulvaney said, “I don’t see anything in here that I have to run a Yelp for financial services sponsored by the federal government.”
Consumer advocates contend that the complaint narratives potentially provide insight into illegal or unfair practices.
But to appease businesses, the CFPB is making some changes to the complaint system, most notably adding disclaimers, which the agency is calling “enhancements.”
The bureau is also exploring how to put consumer complaints in context by adding market share and company size. The theory being large companies with a huge consumer base would of have more complaints.
— Washington Post