Banks Bemoan Feds' Plan to Publish Complaining Consumers' Stories
The Consumer Financial Protection Bureau wants the complaints it handles to be more valuable to the public by including the customer's account of what happened in its database, and publishing it for all to see if the customer wishes. The prospect of having the details laid bare seems to have struck fear into the heart of the banking industry, which strenuously objects to the plan.
08/20/14 7:30 AM PT
The banking industry is up in arms over the United States Consumer Financial Protection Bureau's (CFPB) plan to publish consumer complaint narratives about financial institutions on the Web.
Consumers would have to opt in to have their complaints published. The CFPB would strip out all personally identifiable information. The idea is to expand the existing complaint database to include the customer's description of what happened.
"In many ways, the narratives are the most insightful part of a complaint," the bureau said. "They provide a first-hand account of the consumer's experience and the problem they would like resolved" and would "greatly enhance" the database's utility.
The Bankers' Response
The Financial Services Roundtable, the financial services industry's lobbying and advocacy organization, has set up a website denouncing the CFPB's proposal.
"They say it's about helping customers make informed decisions, but if it's about helping customers, it won't," fumed Roundtable spokesperson Alison Hawkins. "So, if this is about customers receiving relief for their problems, this is already happening and it works pretty well."
As to the CFPB's point about the move increasing the amount of information available to consumers, "we don't know that consumers will see any additional value that they can't already get from the private marketplace," she told the E-Commerce Times.
The Roundtable objects to the complaints being published anonymously, and contends the businesses named will not be able to submit an explanation or a status update on the issue even if it has been fully resolved.
"For example, if a [customer] complains about fees on their account, the company can't explain that the fee was due to the customer not paying," Hawkins said. "Companies really won't be able to substantively respond to specific narratives because they can't disclose any personal information."
Further, the CFPB "will just publish without checking for accuracy," she alleged, pointing out that the bureau "has not said they will not publish blatantly false complaints or complaints where they are not able to verify a business relationship with the company being talked about."
Finally, "70 percent of current claims are resolved without any relief," Hawkins maintained.
The CFPB has handled 400,000 complaints against financial institutions since its establishment in 2011. That is a drop in the bucket when you consider that many Americans have accounts with more than one financial institution, and that the industry includes debt collectors, credit bureaus, payday lenders and banks.
How's That Again?
Companies complained about will be able to post a written response that will appear next to the consumer's story -- in most cases at the same time, according to the CFPB.
Complaints are listed in the bureau's database only after the company complained about has responded, or 15 calendar days after the complaint was filed -- whichever comes first, CFPB spokesperson Moira Vahey told the E-Commerce Times.
If a company demonstrates within 15 days that it has been wrongly identified, no data for that complaint will be posted unless and until the correct company is identified. Complaints can be removed if they do not meet all of the CFPB publication criteria.
Fighting for the Consumer
The Roundtable is "creating a distortion campaign," said Ruth Susswein, deputy director at Consumer Action.
For one thing, companies will know who's filing a complaint against them, just as they do now, so the objection to anonymity is moot.
"What they're saying is a blatant falsehood," Susswein told the E-Commerce Times.
Further, "I read the information on the [Roundtable's] news site and I was shocked at how inaccurate the information was," she remarked. "Maybe they just misunderstood that the complaints would be anonymous to the public."
The Roundtable's contention that 70 percent of complaints to CFPB are closed with a simple explanation is "disingenuous," Susswein said, because that "does not mean they have been settled -- it just means the company decides it's done with the complaint. It does not mean that the problem is resolved or that the CFPB is done with it."