New Credit Card Complaint Database Makes Consumer Gripes Public

If you’ve got a complaint about your credit card or your credit card issuer, you’re not alone. Since July of 2011 the Consumer Financial Protection Bureau (or “CFPB”) has received over 40,000 complaints from consumers about their financial institutions.

Consequently, two weeks ago the CFPB introduced their credit card complaint database.

40,000 bank complaints in 11 months doesn’t sound like very many. Why not? It doesn’t sound like many because, frankly, it isn’t very many.

But, how many of you knew that the CFPB was accepting consumer banking complaints via their website? I’d suggest not very many of you. The agency gets a ton of press but where their efforts touch consumers is still relatively under-covered.

CFPB Credit Card Complaint Database

The credit card complaint database is an exception. Two weeks ago, with heavy press coverage, the CFPB announced the release of their credit card complaint database, which you can see here. And yes, you’ll be able to see which credit card issuer is getting the most complaints and what consumers are complaining about.  The database is public.

The public nature of the database isn’t terribly popular with the banking industry. Their concern, and there’s validity to this, is that complaints aren’t verified before they’re made public. And further, unreasonable complaints aren’t filtered out of the public database. This means consumers with a bone to pick will be able to air their dirty laundry for all to see, whether or not their complaint is reasonable.

The credit card complaint engine on the CFPB’s site can be found here. I took a test drive and while the site isn’t going to win any awards for design, it is very easy to navigate. It looks like the complaints take a few weeks to make it to the public database.

Why File a Complaint?

The question many consumers have had about this database is, “Why?”

It’s a valid question: Why should consumers file a complaint with this site, rather than via the myriad of other consumer complaint websites or even with the credit card issuer directly?

When you file a complaint via the CFPB’s site, you’re filing it with an organization with a pretty significant stick. And, when you file your dispute, the CFPB sends it to the credit card issuer, so it’s ending up with them regardless.

I sent a test complaint and I received an email from the credit card issuer’s “Executive Office,” complete with a name and a direct phone number the next day. And, when I didn’t respond, I got another message from the same person two days later.

You’re probably wondering how in the world the credit card issuer got my email address. When you file a complaint with the CFPB, you’re going to have to provide your name, email address, issuing bank, credit card account number (yep), the bank’s phone number and their website URL. Point being, you’re going to have to clearly identify yourself and the account you’re complaining about if you want the red carpet treatment.

The Silver Lining for Credit Card Companies

To me, this database is very good news for credit card issuers, although they probably wouldn’t agree with my assessment. One of the most difficult things for credit card issuers to do is acquire new customers.

You know all those credit card offers you get in the mail? The response rate on those offers is about half of one percent.

It costs over $300 for a credit card issuer to acquire a new customer, and that doesn’t guarantee the cardholder will: 1) use the card 2) pay their bills on time 3) be profitable or, 4) or take their business elsewhere soon after opening the account. Credit card business may be the most portable of all financial services.

This database will force credit card issuers to quickly respond to consumer complaints. None of them want to be on the “Top 10” list of worst offenders. And, if an issuer gets the same complaint over and over, it’s probably a sign they’ve got an ongoing problem that needs to be addressed and fixed.

I realize this is very “glass half full” of me, but I believe this new database will save credit card issuers from losing customers. If they’re able to quickly respond and rectify complaints and identify and fix billing, fee, statement, credit reporting or other habitual problems, then their customers will be less likely to take their business elsewhere.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.