A recent article in American Banker highlights continuing problems with the complaint database maintained by the Consumer Financial Protection Bureau. The article is based upon internal CFPB documents and interviews with former CFPB senior officials. Sources paint a troubling picture of the CFPB complaint database that raise issues about how those complaints are utilized by the bureau.
One major problem with the database is the tendency of the CFPB to record single complaints multiple times. In one instance, a single complaint was counted as 35 different ones. Such flaws in the system are an unintentional byproduct of the CFPB’s internal policies regarding complaints. The CFPB examines a consumer’s narrative and creates a new complaint for any entity that is named. A CFPB spokeswoman defended the practice, arguing it was the only way to ensure that each named company had “the opportunity to respond to the consumer.”
Inaccuracy is another issue uncovered by American Banker. In one example, a complaint was referred to the CFPB in which the consumer explicitly complained about a payday lender. Yet the complaint was instead filed under the consumer’s bank, which was mentioned only in passing. In another case, a consumer complaint was referred by a state banking department but the CFPB filed the complaint under the name of the general counsel of that agency rather than the consumer’s name.
Overall, the CFPB has put considerable emphasis on the number of complaints it receives. It publishes monthly trend reports on the data and trumpets the sheer number it collects. The agency is careful, however, to note that it does not independently verify the veracity of the complaints. “The Consumer Complaint Database is a collection of 480,801 complaints, on a range of consumer financial products and services, sent to nearly 3,000 companies for response,” the site says. “We don’t verify all the facts alleged in these complaints, but we take steps to confirm a commercial relationship between the consumer and the company.”
The situation feeds into the banking industry’s distrust of the CFPB’s complaint numbers. Since the agency began taking complaints in 2011, many bankers have argued the overall numbers are misleadingly inflated. The damage goes beyond making individual banks or other institutions look bad, however, considering the CFPB can use complaints as a basis for enforcement actions and policymaking. According to American Banker, “The CFPB policies on complaints underscore their interest in complaint numbers, regardless of whether that number is inflated by duplicates or non-complaints.”