The Consumer Financial Protection Bureau announced Friday that it will no longer publish unverified complaints in the Consumer Complaint Database, which includes those against automotive businesses regulated by the agency.
Driving the news: Started after the 2008 financial crisis, the CFPB regulates many auto-related businesses associated with lending, including finance companies and buy-here, pay-here dealers.
Traditional auto dealers are exempt from direct CFPB oversight under the Dodd-Frank Act, so the change does not affect them.
The change by the agency removes the public display of complaints on a federal site.
Zooming in: The agency claimed the sharing of the complaints has resulted in minimal impact and presents “a less-than-representative sample of one-sided experiences.”
It claims the complaints needlessly harm companies’ reputations and create confusion.
“By their very nature, complaint narratives reflect negative consumer experiences and present only one side of an issue,” the CFPB stated in its release. “Additionally, these unverified allegations do not always describe violations of the law, and the complaint process does not verify the allegations in each consumer’s complaint narrative, nor can it, as a practical matter.”
What they’re saying: The change may be welcomed by businesses currently under CFPB supervision, including BHPH dealers who finance vehicles for customers.
But Adam Crowell, Chief Legal and Strategy Officer for KPA, points out that it does not decrease the possible scrutiny of the agency on the businesses.
“For those entities, the unverified and one-sided narratives are no longer publicly displayed, but the underlying compliance rules remain completely unchanged,” Crowell said. “Unverified complaints will still be actively processed and used behind the scenes for internal regulatory oversight.”
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Bottom line: The CFPB is no longer publishing unverified complaints, but it will continue its enforcement activities, and the agency said these complaints could be used in an investigation.
Complaints may also be shared among other agencies and disclosed under public information requests.
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