Cordray says Consumer Complaints are Key to Helping Consumers and the Marketplace


addition to announcing the availability of a new consumer complaint database, Richard Cordray, Director of the Consumer Financial
Protection Bureau (CFPB) told attendees at a Consumer Response Field Hearing
that complaints give the new agency
three distinct and important ways to help consumers

complaint is a chance to evaluate a perceived problem and see if it can be
resolved quickly.  CFPB has received more
than 130,000 complaints from individual consumers, including complaints about
mortgages, credit cards, student loans, auto loans, bank accounts, credit
reports, and more and has helped consumers secure millions of dollars in
monetary relief and non-monitory solutions such as cleaning up credit reports.  In this way he said, our consumer response
team is making a real difference in the financial marketplace.

second important way these complaints make a difference is by informing CFPB’s work
and helping to identify and prioritize problems.  “We know that if we hear
about a particular problem from fifty consumers, that likely means it looms
larger than if we hear about it from two.  We know that if we begin to see
a disturbing trend among the complaints we receive, that we should consider
allocating some of our limited resources to combat that particular problem”
Cordray said.

complaints are also a source of information that staff consults in examining
financial institutions.  They provide leads for enforcement work, investigating
and addressing potential wrongdoing and they help guide dealing with issues of
concern through consumer education and engagement.  “In fact, we find
complaint information to be so helpful that we also access the FTC’s Consumer
Sentinel database to supplement our own,” Cordray said.  The Bureau is also mindful of the need to
share such data in return, so recently it launched a secure Government Portal
to allow other federal and state law enforcement officials to view Bureau data
to inform their own work.  

is important to recognize that even when complaints do not lead to an
individual solution or restitution, they still make a difference.  People
who contact the Consumer Bureau are constantly informing its priorities and
improving its work.

the accumulation of complaints from many thousands of individual consumers
yields an ever-more informative impression of what is happening to consumers en
masse in the marketplace and thus can be helpful to industry and to consumers
themselves in figuring out how they approach consumer financial issues.   The key point is that not all, or even most,
consumer protection comes from government agencies.  The first two places to look for consumer
protection are out in the marketplace, in how a business decides to treat its
customers and in how effectively those customers are able to stand up for
themselves when they are mistreated.

American economy, even just the financial marketplace portion, is among the
single largest uncoordinated aggregation of human behavior ever
developed.  It does not operate according to some central plan, but by the
endless interactions of hundreds of millions of independent actors, each with
their own needs, wants, expectations, patterns, and reactions.  Cordray
said even understanding what is happening in these huge, sprawling arenas of
human life is a formidable task as we see each month as experts make erroneous predictions
about growth, employment, prices, and many other economic and financial
variables.  The humbling lesson is that
every additional piece of data that can shed more light on hard subjects like
these is well worth having.

ability to create and utilize new data that illuminates what is happening to
consumers, in real time, can be immensely valuable.  The more data we can assemble, process, and
share, the more complete and accurate picture we can forge of this immense and
seemingly contradictory creature, and the more we can come to a better
understanding of it.

said that the launch today of the expanded CFPB consumer complaint database
will allow the public to easily track, sort, search, and download this
.  “With all of this information being assembled, the most interesting
thing to watch will be not what we do with it, but what you
do with it.”  The amount of information that can be gleaned from the Consumer
Complaint Database is gigantic.  

companies can use the data to identify their pain points so they can detect and
understand problems and improve their customer service and their general
practices.  Data can help them detect regulatory risks and address
problems before they are faced with potential enforcement action or private
litigation.  They can also view the strengths and weaknesses of their
competitors in a new light.  And perhaps they can find things to tout in
the data:  taking credit, for example, for having the highest resolution
rates or the quickest response times.  Consumers can see which
companies provide timely responses or higher rates of resolution.  They
can draw their own conclusions.  For consumers, this will become a
valuable educational and shopping tool. 

will also be possible for third party sources to rate the performance of
different financial products and services by evaluating what the public, in the
aggregate, has to say about them and no doubt the companies will respond with
their own take.  That is exactly where
these matters should be fought out:  in the marketplace of ideas, subject
ultimately to the verdict rendered by the court of public opinion, which is
just how economic marketplaces are designed to work, Cordray said.

said some have criticized the database and suggested that this information
should be suppressed, but in this age of data and transparency, he believes
sharing it is in everyone’s best interest.  Indeed, the Consumer Bureau
generally supports an open-data agenda.  As part of Project Catalyst, a
program developed to support innovation in the consumer finance space, CFPB will
be using this and other upcoming opportunities to participate in more open-data

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