OIG Report on CFPB Consumer Response Highlights Deficiencies, But Exposes Irony

Last week the Federal Reserve Office of the Inspector General (OIG) published a report of findings regarding its review of the CFPB’s Consumer Complaint Database. In summary, the study concluded that the Office of Consumer Response has implemented controls to monitor the accuracy of complaint data in the internal case management system, but it has not established management controls to ensure the accuracy of data extracted from the system and posted on its public database.

Specifically, they found that:

1. Consumer Response does not review all company closing responses, including verifying whether the company-selected response is consistent with the definition.
2. Consumer Response doesn’t consistently publish untimely company closing responses in the Consumer Complaint Database.
3. Consumer Response allows 60 days for consumers to dispute company responses, rather than the 30 days stated in their publications.
4. Consumers are not consistently offered the opportunity to dispute untimely company responses.
5. Although Consumer Response says the database is refreshed daily, evidently there are lapses, and the agency doesn’t consistently notify the public when they fail to do so.

The report also noted that in December 2013 Consumer Response established policies for removing records from the internal case management system and for withholding and withdrawing complaints from the Consumer Complaint Database, however as of June 30, 2014, no records have been identified for deletion since the removal policy. Specifically, Consumer Response withholds complaints for reasons such as the inclusion of material false statements, consumer withdrawal, and the presence of confidential trade secrets. According to Consumer Response management, this policy can also apply to removing complaints that contain significant inaccuracies.

OIG made a series of recommendations to address the deficiencies. The Office of Consumer Response basically concurred with all of them and addressed changes in progress.

insideARM Perspective

Two thoughts:

One, a lot of care was evidently taken to ensure that what the consumer sees is accurate and that companies are held accountable for timely response, etc. No argument with that.  What I will also applaud the CFPB for which the Federal Trade Commission (FTC) has never done with its complaint process; they confirm the identification of the relevant company. This one seemingly small – but very significant — step has effectively reduced the number of complaints officially reported/tracked (CFPB vs. the FTC) by more than 80%.

However what was not addressed at all in the OIG recommendations was the addition of controls to ensure that what consumers enter is accurate (i.e. the nature of the complaint in the narrative matches the category selected), or to address inconsistencies between what the company sees and what the public sees (i.e. The complaint ID on the back end does not relate to the complaint ID on the front end, so there is no way for a company to efficiently reconcile one to the other.

One issue, for instance, is that the company has no way to know whether the consumer has disputed its response. Another example is that consumers may complain that they were called by the agency after they asked them to stop; or simply that they were called and they are not the right person – but they neglect to put their phone number in the complaint, so the company has no way to investigate.)

Two, there is irony in the OIG’s conclusion that “Although the number of complaints with inaccuracies that we identified was relatively small, enhancing existing controls would help ensure that as the number and types of complaints published increase, overall reliability of the data is maintained.” So, the OIG is commenting on the policies and procedures (or lack thereof) of the CFPB, which is the primary bailiwick of the CFPB when investigating those it supervises. While few in the ARM industry would argue the importance of having current policies and procedures and a reliable method of ensuring they are in practice, the reality of perfect implementation is elusive. There seem to be consequences for imperfection within private companies; what are the consequences within a government agency?