A policy proposed Wednesday by the Consumer Financial Protection Bureau would give consumers the go-ahead to voice public complaint about financial companies, including lenders.
Under the agency’s proposal, consumers would have the option to share their financial narratives and experiences through an existing online complaint database—information that the CFPB says will provide important context to the complaint. In turn, that context would be used to help the public detect trends, aid in decision making and drive improved customer service.
“Right now, the database groups complaints into high-level categories such as “transaction issue” or ‘advertising and marketing,’ said CFPB Director Richard Cordray in announcing the proposal. “Hearing directly from the consumer about exactly what happened would say much more. The narrative supplies vital information about why the consumer believes they were harmed, and how the problem has affected the consumer’s life.”
Consumers already have the opportunity to voice complaints through a complaint database launched by the CFPB in 2011. Complaints are organized by product type—including reverse mortgages—and allow consumers to name the company they worked with as well as provide basic information about the experience. To date, the complaint database has yielded more than 400,000 reports.
The complaint database was met with initial concern among the financial community as to the verification process for complaints. The CFPB does not require verification of the complaints, rather consumers are able to complete a report without input from the company.
Now, the agency says, it’s looking for more detailed information.
“In many ways, the narratives are the most insightful part of a complaint,” the CFPB said in its introduction of the proposal. “They provide a first-hand account of the consumer’s experience and the problem they would like resolved. By giving consumers an option to publicly share their stories, the CFPB would greatly enhance the utility of the database, a platform designed to provide consumers with valuable information needed to make better financial choices for themselves and their families.”
The agency also outlined specific safeguards for publishing the additional information. for example, the consumer must opt-in; no personal information will be shared; companies can publish their response next to the consumer’s story—in most cases at the same time the complaint appears; and complaints can be withdrawn at any time.
Further, the CFPB stressed that the policy effort is to improve upon the existing framework for complaint collection, noting that it now confirms the commercial relationship between the consumer and the company and that complaints are only list after the company responds or has had the complaint for 15 days, whichever comes first.
Written by Elizabeth Ecker