Would knowing the complaint history against a credit card company help you make a more informed decision about whether or not to deal with them? The U.S. government's new Consumer Financial Protection Bureau (CFPB) seems to think that it will. As of June 19th, the CFPB has made its database of complaints against credit card companies available online for anyone who wishes to view it.
"Each and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight," said CFPB Director Richard Cordray. "The information helps us and it should be available to help others too. By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market."
Congress created the CFPB in 2010 when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFBP website says its mission is "to make markets for consumer financial products and services work for Americans - whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products."
The CFPB's mission includes taking consumer complaints and restricting unfair, deceptive or abusive acts or practices by credit card companies, mortgage companies and other types of lenders. It also gathers data and makes reports about consumers and financial services markets.
When consumers file complaints about a credit card company (or a mortgage lender or a student loan provider) with the CFPB, their complaints are reviewed CFPB intake specialists. They check to make sure it is complete, falls within the jurisdiction of the CFPB and isn't a duplicate of a complaint already filed. Complaints that make it past this initial review are forwarded to the lender, which is expected to respond within 15 days and to resolve any disputes within 60 days.
The CFPB database, which is now in the beta testing stage, will provide a look at all complaints against credit card companies that have been filed with CFPB after June 1, 2012.
The database shows the date on which the complaint was filed, the company that it was filed against, the zip code of the complainant, the issue, the date the company responded and the resolution of the complaint. All the data can be sorted by fields; if a consumer wants to look at the number and type of complaints filed against a certain credit card issuer, for example, he/she can click on the company column and get an alphabetical listing of issuing banks.
The CFPB database contains no personally identifiable information, so those making complaints do not have to worry that their privacy is being violated. Although the CFPB does verify that the consumer actually has an account with the credit card company, it does nothing to verify the validity of the complaint.
That lack of verification has drawn complaints from credit card issuers.
"While our industry stands ready to work with the CFPB to resolve customer concerns, the Bureau's plan to release unverified data is disappointing and could mislead consumers," according to a statement from the American Bankers Association. "Publishing allegations is often different than publishing facts. The Bureau itself acknowledges the complaints could be inaccurate, and in fact plans to disclaim their accuracy. This makes the proposed database a questionable - even misleading - resource and risks tarnishing the reputation of individual companies without substantiation.
"Complaint resolutions are best handled in a fair and unbiased manner between the parties involved. Where regulators believe process problems exist, they have ample authority to correct them. Publicizing allegations that may or may not have any basis in fact raises serious questions about the balanced review we expect from our government agencies."
The credit card database is just the first of several complaint databases that the CFPB will make available to the public. It eventually plans to open up for public viewing complaint data about mortgage lenders, student loan providers and other lenders.