The nation's new consumer protection agency is about to start naming names, albeit in baby steps.
Despite vocal opposition from the financial industry, the Consumer Financial Protection Bureau on Tuesday launched a website that allows consumers to browse through complaints filed against large financial companies.
Website users can see the name of the company targeted by each complaint, the nature of the issue, the company response -- including timeliness -- and the zip code of the complainer. Users can also generate charts showing which banks attract the most complaints, which issues are hardest to resolve and which regions of the country seem most irritating by bank practices.
“(This) is a major milestone for consumers and all those who are interested in knowing more about their day-to-day experiences,” said Richard Cordray, the bureau's first director. “We believe this is the first time that the general public has been able to see such individual-level consumer complaint data for financial products and services. … Anyone with access to the web will be able to review and analyze the information, and draw their own conclusions.”
Initially, the website includes only a small fraction of the 17,000 complaints filed regarding credit cards since July of the last year, when the agency began receiving customer gripes. Only complaints filed since June 1 will be available at first, as the agency works out the kinks in its "beta" launch of the database.
A change in the way the agency categorizes resolutions has forced the agency to limit the initial release, said an agency official, speaking on background. Older complaints are being re-categorized and will be added to the public database by the end of the year, the official said.
Complaints about mortgages and checking accounts will also be added later, making Tuesday’s launch a bit of a baby step toward providing full access of complaints to consumers.
The financial industry has complained that release of the data is unfair, as the complaints will represent raw, unverified data that could be misleading.
"Bureau publication of complaint data alone implies an official endorsement of inferences drawn out of context and suggests reliability about overall issuer customer experience and satisfaction that is not well-founded and that invites untrustworthy analysis that will mislead consumers, said the American Bankers Association in its public comments on the consumer bureau's proposal to publish the data.
The bank lobbying group also complained that publication of unverified complaints is at odds with the bureau's mission to be a data-driven banking regulator.
"The Bureau’s proposal expands its role by inventing a new mission of publicly outing information about an issuer’s customer experience and satisfaction record, a function that is fundamentally at odds with its obligation to handle confidentially supervisory information," it said.
Other banking officials have compared public release of the data to gossip, and the database to the customer review site Yelp.com, complaining that many consumer complaints are unfounded, and some are fraudulently posted by competitors.
But the bureau official said each individual complaint was a worthy data point that consumers should consider when weighing decisions on banking products, and that release of the data would give banks an incentive to compete on customer service.
The agency will confirm that an authentic business relationship exists between complainer and target, but nothing else about the complaint will be verified. A warning will tell users that accuracy of the information has not been confirmed, according to the agency official. Complaints will not appear until a bank has responded, or until the 15-day response period has passed, nor will the agency offer opinions on the meaning of the data, the official said.
Initially, the "narrative" section of the complaints will not be published, because the agency has not yet determined how to sanitize the information to avoid publishing personal information, which could be harmful to the consumer. In fact, Cordray stressed that none of the complainers' personal information will be published.
Most government complaint data is not public, a situation which has drawn criticism in the past from consumer advocates. The Federal Trade Commission, for example, collects hundreds of thousands of complaints from consumers but only makes the information available in aggregate, or when it files litigation against a firm. Because only a tiny fraction of complaints lead to litigation, the possibility exists that consumers fall for scams or unfair business practices committed by firms that are already attracting a pile of complaints in a government database.
The consumer bureau’s model suggests consumers might be able to learn from each other, and avoid unfair treatment that way. The data will provide a real-time view of what's happening in the marketplace, the agency official said, and could prevent consumers from falling for new tricks or traps invented by the financial industry.
But even in the Internet age, where sites like Yelp that let consumers warn each other are common, sharing of complaints filed with government agencies is extremely controversial. Last year, the Consumer Product Safety Commission made its complaints available for the first time at SaferProducts.gov. Almost immediately, an as-yet-unnamed firm filed a federal lawsuit to keep a complaint about an allegedly dangerous product off the public website.
Cordray said he hoped publication of the data would make it easier for consumers to seek fair treatment from financial institutions.
“Nobody needs to be told there are deep problems in the consumer financial product marketplace – it is why we were created in the first place…For every consumer who reaches out to us to tell us about their troubles, we know that many others have the same troubles but suffer them in silence,” Cordray said. “These complaints tell us personal stories of real pain. … Do your own digging. Find your own information. And help us make the marketplace a better and safer place.”