The Consumer Financial Protection Bureau (CFPB) recently launched public access to its Consumer Complaint Database (Database), which is the nation’s largest public collection of consumer financial complaints. According to the CFPB, the Database is a collection of over 424,000 complaints, sent to nearly 3,000 companies for response and is updated with additional complaints nightly. The data associated with these complaints is now downloadable for anyone interested in analyzing complaint trends. Unfortunately, the Database generally contains one-sided narratives, with pre-formatted company responses, which makes it difficult for anyone analyzing the data to get a holistic picture of the transactions in question.
The CFPB now appears to be the primary search result for any consumer lender complaint, regardless of local jurisdiction, when using online search engines such as Google. The CFPB has been gathering consumer complaints about financial products and services including bank accounts, credit cards, credit reporting, debt collection, money transfer, mortgage, payday loans, pre-paid cards, student loans, vehicle/consumer loans and other financial services since December 2011, and refers complaints to local jurisdictions where applicable.
What items should consumer finance providers who are the subject of one (or more) of these complaints consider now that complaints are public?Companies must make sure to have a designated team responsible for promptly researching and responding to these complaints. The CFPB process allows for an initial response time of only 15 days, with an option for extension to 60 days for more complicated complaints. Failure to meet these timeframes lists the company as having “no response” in the public database. There is no option to provide any public explanation for a reasonable delay in response. Under the Federal Freedom of Information Act, any person has the right to request access to documents in the possession of the CFPB. Companies must make sure to label appropriately any sensitive information that is reported back to the CFPB in response to a consumer complaint that may contain trade secrets and commercial or financial information as subject to one of the FOIA exemptions. The consumer has the option to make a complaint public. The CFPB does not verify facts in these complaint narratives and only takes steps to confirm a commercial relationship between the consumer and the company. The database publishes the complete consumer narrative submitted, after removing personal consumer information. Accordingly, the narrative captured in the Database only represents the customer’s side of the story and is therefore completely one-sided. The company has the option to also make their response public. However, the Database only allows the company to select from nine, pre-formatted responses which are found in the Company Portal Manual (Manual). This Manual is only given to companies that sign up to receive complaints through the portal and does not appear in the list of Guidance Documents on the CFPB website. Lack of public response in the Database could be perceived as an admission of wrongdoing. Not allowing companies the same narrative option to respond significantly diminishes the Company’s ability to effectively explain its response to the complaint. Moreover, the fact that the Manual is not publically available from the CFPB makes it difficult for anyone analyzing the data to get a holistic understanding of the Database. The consumer is allowed to withdraw the authorization to publish a complaint at any point in the process. Accordingly, financial service providers may want to consider requesting that customers agree to withdraw complaints as a part of the comprehensive settlement agreement for more complicated matters.
Now that almost half a million consumer complaint narratives have been published, combined with the fact that the Database will not allow companies to submit their own narrative in defense of the complaint allegations, companies need to develop a plan to address how complaint information about their company appears in the Database.