Miffed at your mortgage lender? Being driven crazy by your credit card company? Frustrated by your bank?
Chances are you’re not alone. As our partners at U.S. PIRG Education Fund have documented for years, the financial services industry is riddled with deceptive and abusive practices that affect millions of consumers each year.
Until recently, however, it often took years for enough stories of consumer heartache to emerge to catalyze a public policy response to problems in the financial services industry. At the same time, consumers with a beef with a particular firm were often forced to wage lonely, time-consuming battles to get justice.
Enter the Consumer Financial Protection Bureau, or CFPB, the Wall Street watchdog created in the wake of the financial crisis with the lofty mission of making the marketplace for financial services safe for consumers. One of the CFPB’s core functions is to receive consumer complaints about financial service firms. Not only does the CFPB help individual consumers get a fair shake, but the complaints process also serves as a kind of early warning system alerting the CFPB to shady new practices that deserve further scrutiny. And because the agency makes information about complaints public, the media, consumer advocates and ordinary citizens can use that data to gauge how well financial services firms (and the CFPB itself) are performing.
Yesterday, Frontier Group teamed up with U.S. PIRG Education Fund to release the first of several reports that draw lessons from the CFPB’s Consumer Complaint Database. Big Banks, Big Complaints (written with the assistance of Frontier Group’s amazing summer intern, Spencer Alt) digs into the nearly 19,000 complaints that consumers have filed with the CFPB about banking accounts and services, highlighting which banks have received the most complaints, which banking services have been most problematic for consumers, and how banks have responded to consumers’ complaints.
Much of the media coverage of the report predictably focused on which banks received the most complaints. But there is one piece of information in the report that should not be ignored: of the 19,000 consumers who filed complaints with the CFPB, roughly 5,000 received some form of monetary relief as a result of their complaint, with an additional 1,000 consumers receiving non-monetary relief. Those thousands of consumers have seen their lives improved in tangible and meaningful ways by the existence of the CFPB.
The CFPB has been under non-stop attack from Wall Street from the moment of its birth, and the financial services industry been very unhappy with the CFPB for making its complaint data public. The CFPB’s Consumer Complaint Database, however, reminds us of the power of information transparency (a long-time focus of Frontier Group’s good government work). Now that banks and other financial services firms know that consumer complaints will be seen by potential customers, the media and regulators, they have extra incentive to do right by their customers before errors, disputes or misunderstandings escalate into complaints.
Keep an eye on the Frontier Group website in the months ahead for additional reports on consumer complaints about private student lenders, credit bureaus, credit card companies and other financial services firms. And do yourself a favor and get to know the CFPB – an agency that is already doing tremendous work for American consumers.
Associate Director and Senior Policy Analyst, Frontier Group
Tony Dutzik is associate director and senior policy analyst with Frontier Group. His research and ideas on climate, energy and transportation policy have helped shape public policy debates across the U.S., and have earned coverage in media outlets from the New York Times to National Public Radio. A former journalist, Tony lives and works in Boston.