Is Making the CFPB’s Consumer Complaint Database More "Open" Good Or Bad?

March 23, 2015 Dennis D. McDonald

It’s hard to comment on the recent announcement by the U.S. Consumer Financial Protection Bureau (CFPB) about adding “consumer narratives” to registered complaints without also commenting on law and politics, but here goes.

I look at doing this less from politics and more from the angle that this is an example of the continued and inevitable overlap between “government transparency” and “open data.”

Background: The CFPB has been collecting consumer complaints about financial institutions since 2011. It gathers them via the web and creates from them a consumer complaint database. The CFPB then transmits the complaints to the companies and provides a Socrata-powered website that lists a brief description of the complaints it gathers along with descriptive information such as product type (e.g., mortgage, consumer loan, data collection, etc.), issue type (e.g., communication tactics (e.g., false representation, loan servicing issues, etc.), state, date received, name of company, and how (or whether) the complaint has been resolved.

Data made available to the public via CFPB’s web portal do not include information about the identity of the person submitting the complaint. The complainant can log in privately at any time to check the status of resolving the complaint. The tools made available as a standard part of the public web interface include the ability to perform basic analytical and visualization tasks (e.g., filter and display complaints by particular company’s name) and to download the data to perform additional analysis or distribution of the data.

The CFPB does provide its own public statistical reports on the data. The work behind the scenes concerning how consumer complaints once registered with and forwarded by the CFPB to companies are resolved is not detailed in public except for a brief description of the resolution when it occurs.

The CFPB is now proposing to making public “narrative” information about the individual complaints as supplied by the complainant and as responded to by the company against which the complaint is being filed. Consumers registering a complaint will have the option to specify whether, along with the high-level details already being made public, additional text can be provided online to “personalize” the complaint and provide more “context” so that the significance and meaning of the registered complaints can be better understood.

One financial industry group is opposed to providing such additional detail to the public and may be considering litigation given fears about possible misuse or misinterpretation of such additional contextual data.

Having spent some time working with customer care and call center departments of organizations such as appliance manufactures, truck manufacturers, public utilities, insurance companies, and veterans benefits organizations, I agree that it is possible for the public to “abuse the system” through misrepresentation and outright scams. That is human nature. Customer care professionals know this and regularly build rules and procedures to recognize and control for such behavior. So while I agree with industry representatives that it is possible that some might try to “game the system” by supplying contextual information that some might characterize as inaccurate, I also believe that there are ways to control for such behavior.

But — and this is a big “but” — it’s also generally true that those of us working in the “open data” field also recognize the importance of providing contextual information to help in the interpretation of the raw numbers that so many open data portals now provide as a standard feature. You might even say that the CFPB, by providing more contextual information about individual complaints, might actually reduce the uncertainty and misinformation surrounding complaints. (This is why many structured interview type surveys end with a question like “Now can you describe your experience with X in your own words?” since it’s difficult to accurately represent all the nuances of personal responses through use of precoded response categories.)

Politically I can understand how any industry would resist any government sponsored effort to air “dirty laundry” in public. As a taxpayer I also see the advantages of making the efforts of federal regulatory agencies more transparent and understandable to the public. One reasons is to hold the agencies themselves accountable. If an agency is charged legislatively with responsibility for certain regulatory actions we taxpayers have the right to know whether these activities are in fact having a positive impact. Making more data available to the public about what’s going on, assuming that (a) personal privacy is being protected and that (b) potential abuses of the system are being monitored and controlled, should be a step in the right direction towards more government accountability and transparency.

Realistically it’s also impossible to control what people say online about companies. Having an “official” complaint channel, even one that is well-controlled and effectively monitored, will not prevent consumers from using services as diverse as Facebook, Yelp, consumer complaints sites, corporate social networks, Twitter, Google+, personal blogs, and email to spread personal experiential information about real or perceived problems experienced with individual companies. Just type the name of any large company into the Google search engine followed by the word “sucks” and you’ll see what I mean.

Note also that nothing the CFPB is doing is preventing a company from on its own using social media, social networking, and modern CRM technologies to perform its own customer support and complaint handling. Because of this it may be reasonable to ask why the Federal government should be involved in complaint handling in the first place. Is it because financial services companies generate an excessive number of consumer complaints? Is it because financial services companies themselves have inadequate complaint handling processes? Is it because financial services companies wield such life-and-death power over individual consumers?

As I noted at the outset, such questions naturally lead us back to discussions of law and politics. However, as a project manager with a passionate interest in open data program management, I would sincerely hope that all stakeholders in this scenario would be able to collaborate with as much transparency as possible so that, eventually, such transparency efforts become superfluous.

Postscript added April 8, 2015

On March 30, 2015 the author was interviewed about this article by Chris Dorobek of Govloop. Here is the 20-minute audio from that interview:

See this content in the original post

Related reading: