Banks Bemoan Feds’ Plan to Publish Complaining Consumers’ Stories

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.”

Richard Adhikari

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

1 Comment

  • Perhaps Ms. Hawkins should speak to any of the three million people who lost all of their equity in the recent debacle. Trust us, the current system for providing relief is not working very well for anyone except, perhaps, for her clients. The mind stretches when attempting to identify any source of information from the private marketplace that exposes any weakness in a financial institution. I mean, Mr. Nader and his descendants try, but the lawyers still manage to keep things awfully dark. As for the sanctity of personal information, my credit report is available to anyone interested in checking it out, and some of us do just go ahead and publish all of the gory details on our own.

    See http://www.desolationpress.com/essays/disgorge.html for an example.

    There’s not much point in trying to hide the economic scar tissue, eh, Ms. Hawkins?

    The article closes with a sound insight, that the bank gets to arbitrarily "close" any complaint without addressing the underlying issue in any substantive way.

    See http://www.desolationpress.com/essays/pncreply.html for an example.

    Therein, perhaps, we find the real motive for the FSR effort: they simply don’t want to talk about what their members actually do about any of the issues discussed in the database, so let’s try to poison that well in a pre-emptive (and clumsy) manner.

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