Federal Watchdog Finds Inaccuracies with CFPB’s Complaint Database

Concerned with the accuracy of complaints compiled in the Consumer Financial Protection Bureau’s (CFPB) Consumer Complaint Database, one federal watchdog is recommending certain management controls be made to improve oversight of the data.

In a recent audit of the CFPB’s Consumer Complaint Database, the Office of the Inspector General (OIG) found several “noticeable inaccuracies” in its analysis of 254,835 complaints in the Database as of June 30, 2014. The audit covered processes performed from January 1, 2014 through June 30, and included all complaints in the Consumer Complaint Database through June 30, 2014.

These complaints involved a variety of financial products and services, including bank accounts or services, credit cards, credit reporting, debt collection, mortgages, money transfers, private student loans and vehicles or other consumer loans.

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The CFPB’s Office of Consumer Response is responsible for processing consumer complaints, which the agency uses in its efforts to supervise companies, enforce federal consumer laws, as well as write rules and regulations.

In its audit, OIG found that Consumer Response does not review all company closing responses, including verifying whether the company-selected response is consistent with the definition; and consistently publish untimely company closing responses in the Database.

Additionally, the OIG found that the CFPB allows 60 days for consumers to dispute company responses, rather than 30 days as stated in Consumer Response publications.

“Further, consumers are not consistently offered the opportunity to dispute untimely company responses,” OIG writes in its audit report.

Trade associations and companies have argued that disclosing unverified costumer complaints may expose the data to manipulation and may also unfairly damage the reputations of companies.

Earlier this month, the Mortgage Bankers Association (MBA) and Consumer Bankers Association sought changes for the CFPB’s complaint collection and how this process is managed. The trade groups specifically highlighted CFPB’s publishing of consumer narratives, referring to their “unsubstantiated” nature.

“In MBA’s view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting,” MBA stated in a letter to the CFPB.

To improve controls for how the Consumer Complaint Database is managed, OIG proposed several recommendations for the Assistant Director of Consumer Response.

These include implementing controls to separately assess the accuracy of complaint fields in the Database; formally document standards for data entry of complaints; implement address verification processes; and develop approaches for monitoring company closing responses.

Other recommendations call for the Assistant Director to verify the effectiveness of recent system changes to ensure that untimely company closing responses, regardless of investigation status, are published; and that the Assistant Director formally clarify the time limit for consumers to dispute company closing responses.

In its responses to OIG’s draft of recommendations, the CFPB Office of Consumer Response agreed with the proposals and indicated that it has already initiated actions to address them.

The Office also stated that it has implemented a system change to update the process for untimely company responses and related consumer disputes, and it is replacing the CFPB’s internal Data Team Complaint Database.

Written by Jason Oliva

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