CFPB Expands Public Consumer Complaint Database

by Ballard Spahr LLP
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The Consumer Financial Protection Bureau has expanded its public Consumer Complaint Database to include complaints about mortgages, bank deposit products and services, student loans, and other consumer loans (which category includes complaints about auto loans and leases). The database was previously limited to credit card complaints.

The CFPB uses complaint data to establish supervision, enforcement, and market monitoring priorities. It also shares complaint data with the Consumer Sentinel Network, an online database of consumer complaints maintained by the Federal Trade Commission that can be accessed by federal, state, and local law enforcement agencies. The database expansion means that the added complaints will now also be available to plaintiffs’ lawyers who can mine the data for potential litigation targets. Ballard Spahr will be conducting a webinar on the expansion’s implications for the consumer financial services industry; details will be provided in the near future.

Effective March 28, 2013, the CFPB’s action expands the database from about 19,000 complaints to more than 90,000. A breakdown issued by the CFPB provides statistics about the complaints now in the database (such as the number of complaints by product and sub-product), and details on the 12 fields of complaint information disclosed by the database.

In addition to complaints about the products covered by the expanded database, the CFPB takes complaints about credit reporting through its Consumer Response operations. In its press release announcing the database expansion, the CFPB indicated that it plans to include credit reporting complaints in the database in the near future and, when it begins taking complaints about other financial products and services, to add them to the database eventually. That means complaints about debt collection and payday loans, which the CFPB is expected to begin taking in 2013, also will be included.

In addition, the CFPB has issued a final Disclosure of Consumer Complaint Data Policy Statement, a Consumer Response Annual Report, and a Snapshot of Complaints Received. Highlights are summarized below.

Policy Statement

The Policy Statement sets forth the conditions under which a complaint will be included in the database. Those conditions do not require the CFPB to validate a complaint’s factual allegations (which the industry has strongly criticized). They only require that the complaint not duplicate another CFPB complaint from the same consumer, not be a whistleblower complaint, involve a consumer product or service within the CFPB’s jurisdiction, and be submitted by a consumer “with an authenticated commercial relationship with the identified company.” The last condition is typically satisfied by verifying an account number provided by the consumer.

The Policy Statement lists the complaint information fields that will be uploaded to the database and describes the CFPB’s process and timelines for including data about a given complaint. It also describes the database’s functionality and indicates that although consumer and company response narratives are not currently included, the CFPB will be studying how it might include those narratives in a way that addresses privacy and other concerns.

Snapshot and Annual Report

The Snapshot analyzes complaints received by the CFPB from July 21, 2011, through February 28, 2013, while the Annual Report only covers complaints received in 2012. Both reports indicate the most common types of complaints for each product and how complaints have been handled. Except for credit reporting complaints, they provide the median amount of monetary relief paid to consumers.

Through February 28, 2013, the CFPB received about 131,300 complaints, with about 91,000 of them received in 2012. Based on the CFPB’s breakdown of the number of complaints received in each category, credit card and mortgage complaints accounted for 70 percent of all 2012 complaints and 72 percent of all complaints received through February 28, 2013 (approximately 94,300 complaints).

The Snapshot indicates that about 48 percent of the complaints received by the CFPB through February 28, 2013, were submitted via the CFPB’s website, 9 percent via telephone calls, 32 percent via referrals from other agencies and regulators, and the balance via mail, e-mail or fax. The three most common credit card complaints involved billing disputes (15 percent), APR or interest rate (10 percent), and identity theft/fraud/embezzlement (8 percent). Sixty-one percent of the mortgage complaints involved problems when a consumer is unable to pay (loan modification, collection, or foreclosure) and 22 percent involved making payments (servicing, payments, or escrow).

The Annual Report makes clear that a company’s failure to provide a timely response or a consumer’s dispute of a company’s response could lead to further CFPB review and investigation. The CFPB states that, as a result of such investigations, complaints have been referred by Consumer Response to “colleagues in the CFPB’s Division of Supervision, Enforcement, and Fair Lending & Equal Opportunity for further action.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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