What Is the CFPB Consumer Complaint Database and How Can You Use It?
In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the financial crisis of 2008. Dodd-Frank is a wide-sweeping law that curbs many shady practices previously employed by big banks and Wall Street. One of its most important innovations is the Consumer Financial Protection Bureau (CFPB), the brainchild of now-senator Elizabeth Warren, charged with educating consumers about personal finance and protecting consumers from predatory businesses and markets.
Since its launch in July 2011, the CFPB has undertaken enforcement actions that have provided $11.7 billion in relief to more than 27 million consumers. It has handled in excess of 1 million complaints, and 97 percent of consumers have received timely replies to complaints sent to companies by the Bureau.
CFPB’s Consumer Complaint Database
The Consumer Complaint Database serves as the Bureau’s central repository for consumer complaints and company responses. The complaints and responses in the database illuminate issues that involve inappropriate (or worse) business practices that can trigger regulatory actions and thus improve the financial marketplace for consumers.
The database is, to date, a collection of more than 680,000 complaints forwarded to almost 3,000 companies for response. New complaints are posted when the company responds, but in any case, after 15 days. The complaints include narratives in which consumers explain the circumstances leading to the complaint, as well as the company’s public response to the complaint.
The information is organized so that it can be filtered, sorted and aggregated across various data values and criteria, such as company, product, sub-product, date received, issue type, status and more. The ability to search and download the extensive content of the database makes it a valuable research tool for professionals, journalists, policy makers and the general public.
Scrubbing the Published Data
To preserve confidentiality and the integrity of the database, complaints submitted to the CFPB website are scrubbed before publication (of personal data, names of companies not directly connected to a complaint, location and contact information, employment data, sensitive numbers, dollar amounts, offensive language) according to various criteria, including:
- Consumer consent to publish
- Company response or lack thereof
- Complaint not a duplicate
- Complaint not withheld from company
- Fraudulent complaints
- Unauthorized complaints
- Contains sensitive trade secrets
- Involves whistleblower information that could impact law enforcement action
- Referred to CFPB by another regulator
Unless they trigger an investigation, complaints are not verified by the CFPB except to confirm that a commercial relationship exists between the parties.
Analysis of Common CFPB Complaints
To promote the analysis of the information received by the Bureau, the complaints are categorized by product/service type as follows:
- Bank account
- Credit card
- Credit reporting
- Debt collection
- Money transfer of virtual currency
- Other financial service
- Payday loan
- Prepaid card
- Student loan
- Vehicle/consumer loan
The complaints are further categorized by issue and sub-issue. The data can then be analyzed to identify marketplace problems and trends, which in turn can spur company supervision, enforcement of federal consumer laws, and generation of new regulations.
The database also serves as the basis for reporting important educational information to the public. For example, the recent report used the Consumer Complaint Database’s banking data to rank the best and worst banks of 2016, according to complaint volume and the value of deposits held at each bank.
How the Database Information Could Be Used
The built-in data extraction tools on the CFPB website already provide powerful ways to select and organize data for specific purposes. For even finer control over data export, sophisticated users can take advantage of the database’s Open Data API. The information collected from the database can be utilized for a number of purposes, including:
- Education: Consumers benefit from rankings of product/service providers based on complaints, such as the bank rankings already mentioned. The Consumer Complaint Database is a rich source of information that can guide consumers to make educated choices.
- Class action lawsuits: One of the most important tools by which consumers can seek redress from companies is the class action lawsuit, in which a group of people is represented in court by a member of the group. Several criteria are used to judge whether a class action can proceed, and information from the Consumer Complaint Database can support three of these:
- Numerosity: Class actions require a sufficient number of named parties such that adding each of them to a single lawsuit becomes impractical. This number is flexible, but is generally considered to be dozens of plaintiffs. The Consumer Complaint Database can demonstrate numerosity, although the identity of the plaintiffs may have to be established by other means.
- Commonality: The class action plaintiffs must share a common complaint that can be resolved by a single court ruling. The database can be extracted to include only those complaints that demonstrate commonality, i.e. same company, issue, sub-issue, etc.
- Typicality: When there are a substantial number of complaints about a product or service relative to the number of consumers who purchased the offering, the complaint can be demonstrated to be typical of all consumers within the class.
- Petitions: Another form of redress is the petition. For a petition to have power, it must have a reasonably high number of signers relative to the context of the issue. The Consumer Complaint Database can be used to establish how widespread the audience for a petition might be. For example, data can be collected across the credit card industry to demonstrate a practice that petitioners might want legislators or regulators to address.
Dave Rathmanner is a personal finance writer with LendEdu, and is from northern New Jersey. In his free-time, Dave enjoys watching CNBC a little too much and hacking his finances to perfection.