Credit card users will now have a fair chance of selecting the
most efficient card by easily knowing the number of complaints
against a particular issuer. This has been made possible by the
Consumer Financial Protection Bureau (CFPB), which has made public
an online database that lists individual-level consumer complaint
data related to credit cards. The move is aimed at making the
credit market efficient and transparent.
Information associated with the credit card complaints, such as
the name of the company that issued the card, the customer's zip
code as well as the complaint type will be revealed in the
database. But there will be no access to personal information like
the consumer's name, credit card number or mailing address.
Data released on Tuesday already includes 137 complaints since
June 1, with
Capital One Financial Corp.
) remaining on the top of the list with 33 complaints.
) was the second with 27 complaints, followed by
JPMorgan Chase & Co.
) with 24 and
Bank of America Corp.
) with 15.
The currently available database on the CFPB website is limited
as it includes only credit card complaints since June 1. However,
the agency expects the database to substantially grow by next year.
In addition to credit card complaints, the agency has plans to
include complaints associated with other consumer financial
products in its easily accessible online database.
In order to make the system more transparent and efficient, the
agency is including detailed data that reveals whether the company
has responded to the complaint within time or not. Credit card
companies are required to reply within 15 days after a complaint is
lodged and need to resolve it within 60 days. If a company fails to
do so, the database will capture it.
The disclosure of the credit card complaint information have
raised eyebrows of the financial industry as revealing a company's
name is likely to dent its image. It is also argued that such data
disclosure might be misleading. Also, questions are raised
regarding the verification of complaints that have revealed data.
The CFPB, however, has argued that the relation between a customer
and the company are checked by it.
While we believe that such disclosures might hurt a company's
image to some extent, such measures are in the best interest of the
customers and would help check fraudulent activities of banks. It
would help improve the transparency of the system on the
Moreover, with these initiatives, banks would be somewhat
compelled to serve customers better for fear of losing new
customers. The promptness of these institutions in resolving such
issues would also increase.
Hence, this overhaul would not only benefit customers but would
also keep banks under pressure. Nevertheless, banks that face
lesser complaints will gain from such data showcasing as the system
will help these banks get more customers automatically.
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