Will the UK copy the new US credit card complaint website?

Posted in 'Personal Finance' by Barry Stamp

28 June 2012

In the US, the Consumer Financial Protection Bureau (CFPB) – a federal financial regulator - has published online a database of complaints filed against credit card companies.

This means that complaints received after 1 June will no longer be kept confidential between the company and the complainant. “Our goal is to improve the transparency and efficiency of the credit card market to further empower American consumers”, says the CFPB website.

No personally-identifiable information, such as a consumer’s name, credit card number, or mailing address will be made available on the CFPB Consumer Complaint Database to the general public. Instead, members of the public can track complaints by time, (by hour of day or by day of the month, for example), or by location, (down to postcode level on an interactive map, which for reasons unknown is of the entire Northern hemisphere), or by the responses given, or by number.

Individual complainants also have the ability to log into the CFPB’s website to check the status of their complaint and, when appropriate, to dispute the resolution provided by the financial institution.

Could this level of transparency come over the pond to the UK – administered by the Financial Ombudsman – and if it did, what difference could it make?

Given the number of complaints handled by the Ombudsman, this would certainly aid transparency for all parties and would make the timescales for resolution much more transparent. We would welcome that. But the biggest benefit would be to find out which card companies gave bad service when measured by the incidence of a full blown complaint.

Our own annual Banking and Credit Card Survey goes a long way to reveal which UK credit card companies give good service and which do not. Some of our respondents have a clear sense of humour (‘at least Dick Turpin wore a mask’ commented one), but invariably the detail of complaints make for sad reading.

In our view it’s a great shame that the entire text of complaints made in the US are not made public on the CFPB website. That would give journalists the ability to pick up on some exceptionally newsworthy stories, and to help everyone identify particular weak spots or unacceptable behaviours. At present the Consumer Complaint Database gives only the briefest of detail about complaints. The underlying issue is described only in few words, such as ‘Late fee’, ‘Credit reporting’, ‘Collection practices’ or the ubiquitous ‘Other’.

Complaints about ‘Credit reporting’ could well highlight those companies that don’t pay as much attention to data quality as they should, and that too is very much welcomed.

We’re pretty sure that the UK Financial Ombudsman will be following the new initiative by the CFPB very closely indeed, as should the UK’s Information Commissioner.

Barry Stamp is a co-founder of Checkmyfile and is a Chartered Banker and a Fellow of the Institute of Credit Management. He can be contacted at barry.stamp@checkmyfile.com.