Pull up a chair to hear about the time I tried to correct my credit report. Or would you rather learn about my late-night conversations with confused debt collectors? Oh wait, there’s a hilarious one about a bank losing a big mortgage check.
Not interested? Fine. The Consumer Financial Protection Bureau (CFPB) is. The federal agency wants to publish Americans’ narratives of financial frustration online, allowing people to describe every Kafkaesque turn in disputes with the multi-billion-dollar firms that handle their money.
The bureau logs more than 20,000 complaints a month in its Consumer Complaint Database -- bank blunders, mortgage malfeasance, misdirected money transfers, and more. Each complaint and company response is categorized in a dry spreadsheet, with no elaboration. The CFPB bets an upgraded, expanded database would bring financial service providers the sort of online scrutiny now inundating local businesses such as bakeries and nail salons.
This could wind up like a Yelp for financial services, with some big differences. When complainers submit tales of financial woe, they can decide whether to reveal them on the CFPB’s site. Before anything goes online, companies will have 15 days to respond, and the complaint and company response are scrubbed of any details identifying the customer. These are safeguards that sites like Yelp mostly lack.
The point isn’t just to give complainers a place to sound off and to provide the rest of us entertaining reading -- though we can only hope David Sedaris lodges myriad complaints. A well-run forum should improve service for consumers, who can learn to avoid scams and companies that show a pattern of treating customers badly.
About two-in-five complainers get results from griping to the CFPB. Eleven percent of those in the database get “monetary relief” from companies. The same proportion get some sort of non-cash, but valuable, relief, like having debt collectors stop calling in the middle of the night.
Not everyone wants more transparency in consumer complaints. The Consumer Bankers Association issued a statement July 16, stating that: “This action will ultimately add to consumer confusion, harm industry reputations, and undermine any hope the CFPB may have to be viewed as a fair and honest broker.”
But customers reading a full narrative can judge for themselves whether complainers have a legitimate gripe. Yelp is full of negative reviews of excellent restaurants. Nobody listens to people who whine about spicy food at Indian restaurants, or those who complain about a lack of Bud Light Lime at the local craft brewery.
The CFPB’s proposed changes could give consumers a way to challenge business practices that might not be illegal but are definitely questionable. Practices like what happened this spring when complaints showed student lenders demanding full and immediate repayment of loans from co-signers when borrowers die.
At first, the extra attention and some colorful stories may tarnish some corporate reputations, as the Consumer Bankers Association fears. (Though many firm reputations are just about as low as they can go.) Then, however, these stories might spur companies to treat customers with more respect -- and resolve complaints before they turn into mass entertainment.
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