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The Consumer Financial Protection Board wants to post complaints about financial companies online. In a speech in El Paso, TX in July, CFPB director Richard Cordray claimed, “The narrative supplies vital information about why the consumer believes they were harmed, and how the problem has affected the consumer’s life.”
That’s only if you think anonymous, unverified stories are “vital information.”
What will really happen is the database will spread rumors and misinform consumers, the Financial Services Roundtable (FSR) argues. And they're right.
Unverified, Anonymous Complaints
Here’s part of the disclaimer on the Consumer Complaint Database website, where the complaints will be housed:
We don’t verify all the facts alleged in these complaints but we take steps to confirm a commercial relationship between the consumer and company.
That’s quite the admission. At the same time that consumers will be exposed to unverified, anonymous complaints, the FSR notes that the database ignores “the fact that almost 70%, the vast majority, of all of the complaints CFPB received last year were closed with a simple explanation or clarification.”
Unverified, Anonymous Complaints Will Get Tacit Government Endorsement
Information published by the federal government has an air of respectability. We trust and rely on it. On a daily basis consumers and businesses make decisions based on data produced by the Census Bureau, NOAA, and other agencies.
By posting unverified complaints online, CFPB will free ride on this reputation.
As FSR puts it, CFPB’s database is a bad approach to consumer education:
If the CFPB won’t verify the accuracy of complaints, they shouldn’t post them on a government website where Americans expect to receive facts.
We’ll end up with misinformation traveling at Internet speed. Rumors will spread (Snopes.com will have to set up a section just for complaints to CFPB), consumers will be confused, and the intended purpose of the database--consumer education--will be thwarted.