By Katalina M. Bianco, J.D.
The Consumer Financial Protection Bureau has finalized a policy that allows consumers to make public their complaints about consumer financial products and services. Consumers who submit a complaint to the CFPB now have the option of sharing their stories in the CFPB's Consumer Complaint Database.
In July 2014, the bureau proposed to expand the database to include consumers’ narratives of what happened. The CFPB said at the time that the bureau believes that sharing narratives would help spotlight specific trends and spur competition based on consumer satisfaction with the results of their complaints. The bureau also noted that consumer narratives would help other consumers seeking information on financial products and services to make informed decisions. Reviewers could use the narrative to decide for themselves if the problems experienced by other consumers would stop them from purchasing the same product or service.
Industry reacts. The proposal raised industry eyebrows, drawing strong trade group reactions, mainly opposed, to the idea of public sharing of consumer narratives. Arguments against the proposal stemmed from the belief that the narratives would be subjective, not fully verified, and could misrepresent companies and the products and services they offer, ultimately misleading consumers. Some commenters were concerned about consumer privacy, especially in light of the numerous, highly-publicized data breaches that have been ongoing.
Consumer groups, however, came out in favor of public sharing of narratives, believing that narratives would provide consumers with practical information about other consumers' experiences about financial products and services like payday lending, credit cards, mortgages, and the like. The more information for consumers, the better prepared they will be to avoid similar experiences.
Submission procedures. The bureau's final policy outlines procedures for submitting narratives. Under the policy, after a consumer submits a complaint to the CFPB, the consumer will be given a text box to describe what happened and can attach documents to the complaint. The bureau then will forward the complaint to the company for a response, provide the consumer a tracking number, and keep the consumer updated on the complaint’s status.
Safeguards. The policy has some built-in safeguards intended to protect consumers' financial privacy. For example: consumers must opt-in to share their story and can opt-out at any time; personal information will be scrubbed from the narratives; companies will be given the option to select from a set list of structured response options as a public-facing response to address the consumer complaints; and complaints must meet certain criteria to qualify for narrative publication.
Publication of narratives. Consumers can start providing their narratives, but the CFPB said it will not publish any consented-to narrative for at least 90 days after the policy’s publication in the Federal Register so as to provide companies the opportunity to familiarize themselves with the narrative system.
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