The latest move by the nearly one-year-old Consumer Financial Protection Bureau has banks and credit unions in an uproar, as customer complaints threaten to have a new, federally-sanctioned home on the web.
Complaining about businesses online is nothing new – anyone who has looked up a restaurant review on Yelp knows that. There are many online venues where disgruntled credit card holders can spout angry complaints about what they perceive to be unfair practices by credit card companies, whether it’s high APRs, unexpected fees, or bait-and-switch bonus offers.
The difference is, now the Consumer Financial Protection Bureau (CFPB) has proposed creating an official government website where credit card consumers could search a list of company names and read reviews posted by card holders, in order to see what complaints they have about the cards. A spokesperson for the CFPB said in a statement that the site would let credit card shoppers “get that information when it’s most pertinent and convenient for them.”
Just a Gossip Column?
What’s wrong with letting customers sound the alert about potential problems with credit card companies?
For one thing, there wouldn’t be any accountability for customers. How would the CFPB provide oversight, making sure that the people posting on the site are actual cardholders, or even if they are, that they aren’t just disgruntled consumers with axes to grind?
Carol Kaplan, spokesperson for the American Bankers Association (ABA), says that’s exactly the problem. “Until somebody has had a chance to sort through it and figure out what’s valid and invalid, it’s a gossip column,” she said in a statement. The ABA is trying to put a stop to the site and has issued a 20-page letter to the CFPB laying out their complaints.
Banks are rightfully fearful of damage to their reputation due to unfounded claims by anonymous consumers, saying that online complaints would be “incomplete, unrepresentative and unverified” and “an unreliable and misleading source of information about customer experience and satisfaction.”
Looking Out for Consumers
Meanwhile, the CFPB has received thousands of complaints from credit card customers since opening for business in July 2011, and is eager to find the best way to share the information and make it useful for the public. Announcing their intention to set up an online database, they said that “by enabling more informed decisions about credit card use, the CFPB intends for its complaint data disclosures to improve the transparency and efficiency of the credit card market.”
The Washington, D.C. based nonprofit organization OMB Watch (named for the White House’s Office of Management and Budget) agrees with the CFPB, saying that “Public access to the proposed database of credit card complaints would help consumers make better-informed decisions about financial products.” On the other hand, they admit that precautions must be taken to verify the identity of the posters and legitimacy of the complaints. Of concern that such identifying information would be a violation of privacy, they said, “We believe that the proposed safeguards would appropriately protect submitters’ privacy by excluding their personal information from the database.”
Reviews and Education in the Free Market
Whether or not there is a federally-run website for people to air their credit card complaints, there is no shortage of information online for credit card shoppers. Anyone looking for a new credit card can choose from hundreds of sites – some reputable and some not – that provide credit card reviews and information, both by financial experts and everyday consumers.
Credit-Land.com has been providing credit card reviews for over a decade and employs experts who do just what the CFPB is setting out to do; whether the government site comes to fruition or not, we will continue providing the best in credit card education and information to consumers looking for the best financial products.