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New consumer bureau opens database of credit card complaints

Industry warns that identifying details could unfairly tarnish companies.

The Consumer Financial Protection Bureau has delivered on a promise to mount an online database that gives the public a view of individual-level consumer complaints against credit card companies. It is the first such move by a federal financial regulator.

“Our goal is to improve the transparency and efficiency of the credit card market to further empower American consumers,” Scott Pluta, the year-old agency’s chief of staff and acting assistant director for consumer response, wrote in a blog post Tuesday. “No longer will consumer complaints only be known to the individual complainant, bank, regulator and those in the public willing to pursue this information through the Freedom of Information Act. Instead this data-rich window into consumer financial issues will be widely available to everyone: developers, policymakers, journalists, academics, industry and you.”

Simultaneously, CFPB published a policy statement on use of the database and a report providing a snapshot of more general consumer financial complaints sent to the bureau.

Between July 21, 2011, and June 1, 2012, CFPB received some 45,630 complaints, including about 16,840 credit card complaints, 19,250 mortgage complaints, 6,490 bank products and services complaints and 1,270 private student loan complaints. About 44 percent of all complaints were submitted through CFPB’s website, and 11 percent via telephone calls. Referrals from other regulators and agencies accounted for 39 percent. The remainder were submitted by mail, email and fax.

The bureau determined that 81 percent of complaints merited forwarding to companies for review and response. The rest were found to be incomplete (4 percent), or remain pending with CFPB (6 percent). Companies already have responded to 89 percent of the complaints, the bureau said.

CFPB stressed that the consumer complaint database is a beta version, subject to later improvements and no personally- identifiable information such as a consumer’s name, credit card number, or mailing address will be made available.

Kenneth Clayton, the American Bankers Association’s executive vice president of legislative affairs and chief counsel, criticized the database.

"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,” he said in a statement. “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.”

Noting that less than 1/100th of 1 percent of the nation’s 383 million credit card accounts have generated a complaint to the consumer bureau, Clayton suggested the bureau is seeking to politicize the process and added complaints are best handled between the parties involved.

Bartlett Naylor, a financial policy advocate at Public Citizen, said in a statement, “Industry concerns about reputational risks should be ignored. Disclosure has long proven a reliable disinfectant of market abuse.” The database will help consumers make informed choices and allow them to identify problems with specific banks and “discern the volume of complaints in certain basic categories,” he added. Public Citizen has asked the bureau to add “more granular detail” beyond the generic “late fee” or “billing dispute.”

The database also was welcomed by the nonprofit OMB Watch as a way to empower customers to steer clear of companies that engage in abusive credit practices and fail to respond to complaints.

"The credit card complaint database is a kind of public Angie’s List for consumers," said OMB Watch President Katherine McFate, referring to a website that publishes consumer reviews of service companies. McFate said the CFPB information "will help the public make more informed choices about credit cards and expose unscrupulous industry and company practices. This is a great example of how public policies can make corporations more accountable and responsive to their customers.”

Susan Grant, director of consumer protection at the Consumer Federation of America, said, “The financial institutions are mistaken in believing this is going to be detrimental. By improving their response when consumers contract them directly, they can reduce the number of complaints in the CFPB database and make more customers happy.”

(Image via Marie C Fields/