Do you feel powerless to resolve a debt payment issue, a credit report mistake, or a mortgage servicing issue? Does the financial company promise to resolve the problem, you make repeated calls over several months, and the problem does not get resolved?
Fortunately, you now have one more accountability tool in your toolbox. The Consumer Financial Protection Bureau (CFPB) was required by Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to handle and help resolve consumer complaints. The CFPB also did a smart thing: it publishes the complaint data on the internet. Of course, financial companies hate this and complain, but my bet is that the publicly available data has reduced the number of problems and helps resolve complaints faster than they were fixed before. If you feel you need help on an unresolved issue, you can go to http://www.consumerfinance.gov/complaintdatabase/ to file a complaint and also to view other complaints about mortgages, bank accounts, debt collections, student debt, and more.
The CFPB has started issuing monthly reports that will help consumers and counselors understand trends and pinpoint emerging issues. Since 2012, the CFPB has received 650,700 complaints. For June of 2015, the CFPB reports that the top three products/services in terms of complaints in descending order was debt collection, mortgages, and credit reporting.
The database can be sorted by state, issue, company, and resolution status. When looking at Washington DC, complaint volumes increased 10 percent from April through June compared to a year ago (http://files.consumerfinance.gov/f/201507_cfpb_monthly-complaint-report-vol-1.pdf). Complaints in DC now run about 577 complaints per 100,000 people which is a higher rate per capita than all the other states! Maryland also has a high per capita rate of 333 per 100,000.
A new feature of the complaints database is consumer complaint narratives. The individual consumer is not identified in order to protect privacy, but the narrative appears (if the consumer wants the narrative displayed). Looking at a couple of narratives reported from consumers in Washington DC shows typical complaints. In one case, a debt collection company kept contacting a consumer about debt his brother owed. In another case, a credit reporting company kept records of medical debt owed even though the consumer reports that the insurance company paid the bill.
It is hard to judge a company’s performance definitively on this database without some additional analysis. The companies that show up frequently are large companies, which by their unwieldy nature, will have some staff or divisions that do not do a good job. An analyst needs to “normalize” the data or figure out complaints per loans or complaints per assets or some other measure like this. The CFPB is currently taking comments on how to “normalize” the data. While consumers should certainly use this database to hold companies accountable, they should also be careful in labeling a company bad until additional analysis is conducted. The CFPB itself scours the database to help companies identify issues or bad offices and in some cases to pursue legal enforcement if misbehavior is due to a systematic pattern or practice.
Overall, the CFPB complaints database is a powerful accountability tool for consumers and counselors. Use it!
Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.