What Banks Should Do About The CFPB Complaints Database

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[Note: Some of the recommendations made in this blog post may be sarcastic and tongue-in-cheek. Readers should use their own judgement in determining which, if any, recommendations are serious]

Their eminence and supreme ruler of the financial services galaxy (I’m talking about the Consumer Financial Protection Bureau, duh) recently made public a database of consumers’ complaints against credit card issuers. According to the Washington Post:

Banks have opposed the inclusion of specific companies in the complaints, arguing that many could be unfounded or inaccurate. The database will also only include information for the large banks overseen by the CFPB. “It’s an unlevel playing field,” said Richard Hunt, president of the Consumer Bankers Association, a trade group. “It appears to be a gotcha mentality when it didn’t have to be that way.” The CFPB said it will only publish complaints after it has verified the consumer’s relationship with the company.

My take: Banks should quit whining, get proactive, and use the complaints database to their own advantage. Specifically, banks could:

1. Flood the CFPB with complaints about competitors. The CFPB says that it verifies complainants’ relationships with the the companies being complained about. The submission form does ask for an account number, but that field is optional. All a bank has to do is get one employee to get a card from a competitor, and start filing complaints under that employee’s name. The CFPB won’t have any mechanism for finding out the employment relationships of complainants.

2. Hack the CFPB database. If people are stupid enough to include account information, then hacking the database and turning the spotlight on the CFPB for being the source of a security leak could help shut down the database.

3. Charge cardholders for complaining. The database includes not just the cardholders’ complaint, but the issuers responses to the complaints. Card issuers should levy a fee against cardholders accounts for the time and effort they expend in responding to the complaints. Service isn’t free, you know.

4. Use the data for smear campaigns. If I were the CMO of a credit card company I’d get one of my data-smart people to dig in to the database and find me nuggets I could use against the competition to reveal their poor service and shady tactics. After all, if a customer says they were cheated or discriminated against, it must be true.


On a slightly more serious note, Mr. Hunt has a legitimate gripe.

The CFPB believes that the database will help consumers make more informed decisions about which cardholders they do business with. This belief — or should I say delusion? — is wrong for at least three reasons:

  • It’s way too much work for consumers. Does the CFPB really think that average consumers are going to play data analyst and create charts, graphs, filters, etc. in order to help them decide which credit card to apply for? Bad assumption.
  • Consumers want both sides of the coin. Have you ever used Yelp to see reviews about a restaurant? I bet you read both the good and bad reviews. Potential card applicants will want to know the pluses and minuses of the issuer they’re considering doing business with.
  • Consumers will see through the bias. According to the CFPB’s site: “We do not verify the accuracy of these complaints.” Many consumers will quickly realize that at least some percentage of complaints are completely unfounded — and that will taint the validity of the entire database.

Bottom line: Yet another example exposing the CFPB for what it is: A farce.

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