A recent article by the American Banker claims, based on undisclosed CFPB documents and interviews with current and former agency officials, that the CFPB’s consumer complaint database is widely held to be inaccurate and untrustworthy. The article points to what it believes to be egregious instances of duplicative complaints as well as the misidentification of companies.
The primary practice responsible for these inaccuracies appears to be a process by which the consumer may name multiple companies when submitting a complaint, resulting in separate complaints for each. Where a consumer names many companies, perhaps out of a misunderstanding as to which they truly wish to complain about, each of those appears in the database as a separate complaint about each company named.
This mechanism has both advantages and drawbacks. Often, issues related to consumer financial products and services are complicated, such that consumers struggle to identify the appropriate company responsible, and, according to CFPB spokeswoman Moira Vahey, this process is the only way to ensure that every company potentially involved is given an opportunity to respond. In other cases, multiple companies may disagree as to who is responsible or several companies may play a role in the complaint, for example, in the instance of a complaint against both a credit reporting agency and a creditor regarding disputed information.
However, where consumers are habitual complainers, this procedure allows complaints to proliferate within the database. Consumer Response’s procedures for removing duplicate complaints only allow for consolidation where the exact same complaint is filed against the same company. Investigators also have some discretion to identify duplicate complaints against the same company that do not use identical language but this is rare in practice.
There can also be problems during the intake process, such as where a company is misidentified, where paper documents are transcribed by intake personnel, or where statements are taken over the phone. For some of these issues, the Portal is better equipped for revision than for others. When a company is misidentified, the company receiving the complaint may indicate that this is so through the administrative response categories, which will prevent the complaint’s publication in the database with respect to that company. But complaints where an incorrect consumer name is transcribed are not terribly uncommon. And complaints taken in writing often provide a shortened version of the consumer’s narrative. Furthermore, the agency is contending with larger and larger volumes of complaints and has limited resources, including technological capacity, to ensure accuracy and minimize redundancy.
While a database of consumer complaints that fairly reflects problems in the consumer financial marketplace would undoubtedly be a valuable font of information, the existing system is hampered by rigid technology and limited resources. Consumer Response has shown a receptiveness to making improvements, including issuing a Request for Information on “normalizing” the public database. The CFPB holds industry to a high standard, and should set a similar standard for the quality of its own data. But more improvements must be made if the goal of creating a transparent and fair marketplace for consumer credit is to be achieved. As a federal government agency, the CFPB should seek to treat industry as fairly as it treats consumers.
