By Catherine Dunn - A proposal to include personal stories in a government database of consumer complaints is drawing comparisons to Yelp and Angie's List -- and not in a good way. The Consumer Financial Protection Bureau first began sharing data from consumer complaints with the public in 2012, and it unsettled the financial services industry from the outset.
Now the proposal to add another element to the online portal -- narratives -- has generated a barrage of criticism from industry reps, the Hill reports. During a public comment period, which concluded Monday, Frank Pignanelli, executive director of the National Association of Industrial Bankers, said it would not "serve any legitimate public purpose to turn the CFPB’s consumer complaint database into something similar to a private complaint board or blog like Yelp, Angie’s List or the Ripoff Report where people can publish mistaken or inaccurate information along with vindictive rants against legitimate businesses."
The Financial Services Roundtable echoed those concerns, telling regulators "posting unverified and possibly inaccurate accounts on the CFPB’s website will expose providers of consumer financial services to reputational and financial risk for which there is no effective method of mitigation."
Business groups also cited consumer privacy risks. The proposal, the Consumer Bankers Association wrote, "does not adequately protect consumers’ personally identifiable information ... thus creating the potential for serious risk of reidentification of individual complainants and possibly causing harm to consumers."
Separately Monday, the Government Accountability Office said that the CFPB needs to take more steps to protect consumer financial data. The agency "has not yet fully implemented a number of privacy control steps and information security," the GAO said, recommending the CFPB "develop a comprehensive written privacy plan" to integrate existing policies.
The CFPB collects millons of records each month on consumer credit card accounts and mortgage loans, and has amassed one-time collections of data about private student loans, payday loans and consumer checking accounts.
Meanwhile, since the bureau opened in 2011, consumers have submitted more than 400,000 complaints about their troubles with bank accounts, credit cards, student loans, and other financial products. The agency publishes information, such as the subject of the complaint, the name of the company and whether the matter has been resolved.
But those data points can "begin to feel like impersonal statistics," CFPB Director Richard Cordray said in announcing the plan to publish narratives, with the consumer's consent, in July.
"The actual stories are the heart and soul of the complaint," he stated in prepared remarks. "They convey the kind of frustration and distress that people truly feel as they struggle with difficult financial issues."
Consumer advocates have praised the proposed policy as empowering and informative to consumers.
"Offering consumers access to complaint details in the database is a powerful, practical tool that will allow people to learn more about the financial companies they may do business with, as well as the pitfalls and solutions devised for products and services they are considering," Americans for Financial Reform said in a comment letter signed by four dozen other groups.