The Consumer Financial Protection Bureau’s (CFPB’s) consumer complaint database recently raised significant concerns from insiders at the CFPB as well as entities subject to the CFPB’s jurisdiction. In November 2015, the American Banker reported that the consumer complaint database “is riddled with errors and distrusted by some of its own employees, according to internal documents and interviews with current and former agency officials.”  Additionally, businesses appear to have no recourse for dealing with serial complaint filers.

The CFPB argues that any mistakes are minor and limited in scope, but the agency relies on consumer complaints as a source for industry guidance, rulemaking and enforcement actions, so the problem could have far-reaching consequences. The CFPB has placed substantial emphasis on the number of complaints it receives by publishing monthly trend reports and broadcasting the numbers it collects.  Still, the CFPB acknowledges that it does not independently verify the veracity of the complaints.

The errors have taken several forms. For example, it was reported that a single complaint was counted as 35 different ones.  In another example a complaint was filed against a bank even though it was actually directed at a payday lender.  Errors such as these exacerbate the financial services industry’s distrust of the CFPB’s complaint numbers.  In fact, since the CFPB began taking complaints in 2011, many bankers have argued the overall numbers are misleading.  But miscounting complaints isn’t the only problem CFPB officials have seen.  In another example, a consumer complaint was referred by a state banking department, but the CFPB filed the complaint under the name of the general counsel of that agency rather than the consumer’s name.

There also do not appear to be filters in the complaint database to weed out serial filers. In fact, many businesses are left with no choice other than to expend significant resources to respond to identical or substantially similar complaints filed by the same consumer.  In other instances, litigants that have been barred from court, by either having their cases dismissed with prejudice or being subject to pre-filing review, often turn to the CFPB complaint database as yet another forum to air their alleged grievances that have already been adjudicated on the merits.

The overall number of consumer complaints has risen substantially each year since the portal began operation, jumping from more than 20,000 in 2012 to more than 70,000 in the third quarter of 2015. That tremendous growth has made it difficult for CFPB staff to keep up. The agency is aware of the concern, and last month CFPB Director Richard Cordray issued a response to the American Banker report, stating that the report was “riddled with inaccuracies about the database and how it works.”  He went on to point out that the CFPB’s inspector general published an audit report, which found only a “relatively small” number of inaccuracies in the complaints.  Cordray also remarked that “the [American Banker] story cites only three purported ‘errors’ out of hundreds of thousands of complaints handled.  And since American Banker refused to provide documentation or tracking numbers to the Bureau, it is unclear whether any of these were at all significant.”

The American Banker, commenting on Cordrays’s response, noted that he did not address the statements of former CFPB employees and that he confirmed some of the American Banker’s reporting on duplication of complaints. It remains to be seen whether the CFPB plans to take any steps toward protecting businesses from serial filers.