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Today, the CFPB took an important step to make its excellent public database of consumer complaints even better, by adding complaint narratives (stories), but only with the consumer's consent. It's a step we've long urged. It will enrich our research into the marketplace, help consumers make choices and help good-actor firms avoid bad practices by others. As the CFPB explains:
"Consumer narratives provide a first-hand account of the consumer’s experience, and adding the option to share them will greatly enhance the utility of the database. The narratives will provide context to complaints, spotlight specific trends, and help consumers make informed decisions. The narratives may encourage companies to improve the overall quality of their products and services, and more vigorously compete over good customer service. [...] The CFPB will not publish the complaint narrative unless the consumer provides informed consent. [...] The Bureau will take reasonable steps to remove personal information from the complaint to minimize the risk of re-identification."
Adding consumer stories has been a key recommendation in each of our five (so far) PIRG reports analyzing categories of complaints in the database. Powerful special interests, of course, not only opposed the creation of the database in the first place; they fiercely opposed this enhancement.
Our view: Complaint stories will help other consumers decide where to do business, will help other firms avoid bad business models and will help independent researchers better analyze marketplace practices that are unfair. We're excited that we'll be able to use text analytics tools to do a deep dive into the narrative stories. We'll be able to look for patterns and trends that link complaints that may turn out to be about the same problem. We'll be able to quantify statements such as these: "How many times did the consumer complain to the bank over what period of time? How many promises to stop calling the wrong consumer did the debt collector break? How many mistakes were in her credit report and did the errors recur after supposedly being fixed?"
As we told the CFPB last year in greater detail in our comments supporting the proposed change:
By publishing these “consumer stories,” you will enable researchers, other consumers and other firms to better analyze consumer complaints and concerns.
- Researchers will be better able to identify trends and develop more insights about good and bad marketplace practices;
- Other consumers will be better able to more wisely choose institutions based on a more robust understanding of a firm’s behavior toward its customers, accountholders or consumers it maintains files on. Those consumers will also be able to see if a problem that they are having is the same the problem other consumers are having;
- Other firms will be better able to identify patterns and practices that they might change, or affirmatively choose to avoid, and then be able to market their firm as more consumer-friendly, making it easier for good actors to gain market share and stimulating competition positively, by better aligning the interests of firms with those of their customers and potential customers. Firms without “tricks and traps” should do better in a more transparent marketplace. (In fact, news stories are pointing out that industry consultants are recommending improvements to customer service as a best practice; so are consultant reports, such as one from Deloitte);
- Researchers, armed with more robust data, will be better able to build models to provide early warnings of the kinds of unsafe consumer practices that could lead to a systematic collapse such as occurred in 2008.
Of course, a critical benefit will also be that more consumers will use the database. This positive feedback loop or “network effect” will increase its value to everyone as the financial services marketplace becomes more transparent.
While we support the CFPB's important efforts in its announcement today ensure that the stories protect the privacy of consumers and avoid the collection of information that could allow "re-identification," we look forward (along with other Americans for Financial Reform members) to working with the Bureau to find ways to provide public access to racial, ethnic, age and gender data that can reveal harmful trends, including discriminatory treatment in the financial marketplace that continues to devastate communities of color and other underserved consumers.
Any consumer who has a complaint about any financial firm can complain to the CFPB here (by phone, webform or regular mail). Going forward, you'll be able to add your story to the public complaint database, which currently only lists a summary of your complaint.
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