When it comes to consumer protection there is one thing we can all agree on:  consumers benefit from clear, simple, complete, and accurate information to help them make financial decisions.  We have urged the new Consumer Financial Protection Bureau to focus on providing consumers with clearer, simpler, and better consumer disclosures.   This is why it’s frustrating to see the Bureau so badly stub its own toe this week when it comes to its own disclosures.   

On Tuesday evening, the CFPB announced that it was making available a searchable online database of credit card complaints grouped by company.  The primary goal, they said, was to give consumers “timely and understandable information to make responsible decisions about financial transactions.” 

Makes sense on its face.  But the database is only useful to consumers if the data is sound and presented fairly, and on this point, the CFPB made some bizarre admissions of guilt as part of the policy statement that accompanied the rollout.

On the reliability of the data, the CFPB writes:

The Bureau agrees with industry commenters that its complaint process does not provide for across the board verification of claims made in complaints. However, as it has previously indicated, the Bureau plans to specifically disclaim the accuracy of complaints when the data are made available to consumers. Outside of its own affirmative data reporting, the Bureau will allow the marketplace of ideas to determine what the data show.

And on the impact that unreliable, unverified data may have on consumers?

The Bureau acknowledges the possibility that some consumers may draw (or be led to) erroneous conclusions from the data.

These seem like fatal acknowledgements on the CFPB’s part.  What purpose is served by publishing info that is sketchy enough to warrant a disclaimer, and that the agency believes could misinform consumers? 

What would the Bureau’s attitude be if a company that it regulates took the same attitude about information posted on its website—“we recognize that some consumers may draw erroneous conclusions from our disclosures, but we will allow the marketplace of ideas to correct any misunderstandings”?  Does anyone doubt that the company would receive a tough warning followed by a quick enforcement action?  Shouldn’t the Bureau hold itself to the same standard it applies to the companies it regulates?

This kind of casual data dump is bad enough when the data is aggregated and non-company specific, but once a government agency begins calling out individual companies, it has a responsibility to ensure the data is valid and not misleading.  How might this complaint scorecard be used maliciously by those who want to take a shot at a particular company?

It seems like the goal here is to shame companies randomly by knowingly (and admittedly) publishing misleading data. 

The “marketplace of ideas” concept might work in online reviews, where consumers know to take the results with a grain of salt, but a government database is assumed to be reliable.  This means the CFPB has a responsibility to ensure that complaint information is accurate, fairly presented, and helps consumers make informed choices.  Unfortunately the CFPB, by its own admission, plainly fails this test.