by Jeff Sovern
Last week, the Wall Street Journal published a piece about the CFPB's public database of consumer complaints. This excerpt particularly caught my eye:
The agency's approach rankles some in the financial industry who say the publication of complaints leads to an unfair and overly negative view of companies. They fault the CFPB for failing to verify the facts behind complaints–apart from ensuring the gripe is coming from an actual customer.
"You're throwing allegations up on the wall and hoping something sticks," said Richard Hunt, chief executive of the Consumer Bankers Association.
Of course, it would be ideal for the Bureau verify complaints before posting them. But that would take significant resources, and there are already complaints about the Bureau spending too much. So such a demand is really a catch-22, because it amounts to saying that the Bureau should spend more, thereby giving critics more ammunition against it, or else that it should eliminate the lists altogether, which is probably what the critics really want.
The argument that the Bureau should verify complaints before disclosing them applies with equal force to credit reporting agencies. Credit bureaus do not typically verify the information in their databases before making them available to lenders. And yet, I cannot recall industry advocates calling for such verification.
Oh, come on. “The argument that the Bureau should verify complaints before disclosing them applies with equal force to credit reporting agencies. Credit bureaus do not typically verify the information in their databases before making them available to lenders.” Entities that report to credit bureaus are obligated by law to report accurate information, and there is legal recourse for reporting inaccurate info. Consumers who complain to the CFPB are under no such obligation.