An interesting academic paper out which studies Consumer Financial Protection (CFPB) complaint reporting found the reporting assisted both consumers and the credit card companies.
The investigation looked at the results of public reporting of complaints and found “Consumers procrastinate in reporting exposed banks while rewarding exposed banks for their improved behavior with new accounts.”
Most interestingly, “both consumers and banks benefit when offending banks are exposed online.”
This is a very interesting question because this site has a reporting opportunity for unhappy consumers.
When companies receive a complaint on the GetOutOfDebt.org website I typically notify the company and encourage them to respond to the complaint so they can show the public how they respond to issues. Most people are aware problems will arise but the mark of a good company is how they deal with this complaints. Radio silence just tells people the company might not be able to be trusted. Most companies who receive complaints from consumers on this site elect not to provide a response.
The research findings found, “banks are more likely to close a complaint file or answer the relevant concern to a consumer’s satisfaction; more likely to address credit complaint files with explanations as to why the complaint may have occurred or the infraction justified; more likely to provide some level of monitory relief and more likely to provide a degree of non-monitory relief.”
A conclusion drawn by the paper author is exposed firms become slower to cause such complaints. And because of the open complaint data, “confidence in credit card industry was boosted by the open data policy and banks’ increased accountability in response.”
You can read the entire research paper below.
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