RSSThe Wall Street Journal reports that the Consumer Financial Protection Bureau has proposed expanding its online complaint system to capture more detailed narrative information from consumers. The proposal is now in the required 30-day comment period. The CFPB claims that the additional information will help them to better regulate the industry and punish violators. Some in the banking industry, however, fear that additional details will only serve to malign banks with more unsubstantiated complaints.
Currently, the system collects information that is entered by consumers and then groups it into dozens of high-level categories that include only basic, anonymous, individual-level information about the complaints, such as the date, the company, the product type, and the nature of the complaint. Complaints are forwarded to the company in question and responses from the company are expected within 15 days. Those responses also become part of the database. In its three-year existence, the online system has recorded over 400,000 individual complaints. The complaint data, with personal information removed, is then made available to state and federal agencies as well as the public.
The CFPB’s proposal would broaden the information publicly available to include a consumer’s narrative description of the situation. The current system allows 3900 characters to the consumer to describe the complaint. The proposed change, which can be found here, does not specify a new character limit, leading many to assume it will be open ended. The CFPB describes the augmented data as “ unstructured consumer complaint narrative data.” The proposal states that inviting such narratives will both encourage reticent consumers to file more specific complaints, as well as reveal common traits and issues across many companies that may lead to complaints in the industry.
However, the anonymity of the current complaint summaries is an issue for the banking industry. Many industry professionals have been critical of the CFPB for releasing hundreds of thousands of such complaints, damaging the reputation of many companies, they say. Though the CFPB does attempt to verify that the complaints come from actual consumers, they do nothing to verify the facts alleged in any complaint. This has lead many in the industry to claim that the online system has been unfair. The addition of unlimited, unstructured narratives, they say, promises to add many more details and extraneous information for companies to sort through when they are informed of the complaint and to address when they respond. The Journal quotes Richard Hunt, chief executive of the Consumer Bankers Association, saying that the proposal, if implemented, “will undermine any hope the CFPB may have to be viewed as a fair and honest broker.”
