ACA Releases New White Paper Questioning Data in CFPB’s Consumer Complaint Database


5/10/2016 6:00:00 AM

Methodological and Analytical Limitations of the CFPB Consumer Complaint Database shows how flaws in the CFPB’s consumer complaint database lead to inaccuracies in the bureau’s tallying of debt collection complaints.

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ACA International has released a new white paper as part of its ongoing initiative to collect original data about the credit and collection industry and show how debt collection companies impact the economy. In Methodological and Analytical Limitations of the CFPB Consumer Complaint Database, ACA shows that the Consumer Financial Protection Bureau's consumer complaint database is rife with methodological and analytical flaws.

The white paper examines “specific concerns with the measures used to elicit and organize complaints, bias introduced into the data collection process, and the means by which complaints are categorized by industry.” According to the white paper, problems with the database include non-exclusive reporting categories for complaints, self-selection and confirmation biases, and human error when a consumer misclassifies a complaint.

Because of the confusing complaint categories in the CFPB's complaint portal, where the bureau gets its information for the database, many consumers accidentally submit debt collection complaints when they meant to identify a different financial service. CFPB Director Richard Cordray acknoweldged as much during a hearing before the U.S. House Financial Services Committee. Cordray testified that “when we look at debt, some of these complaints are simply misclassified.”

The white paper concludes that if the CFPB does not provide the appropriate context for complaints in its broad database, then consumers will lack important information for how to understand various complaints; it's near impossible to interpret data that has not been presented in context. 

“The CFPB is able to paint an unfairly negative picture of the credit and collection industry, and other legitimate businesses, because it relies on flawed data that has no context to it,” said ACA International CEO Patrick Morris. “While the credit and collection industry continually seeks to strengthen its practices and reduce the number of complaints, the fact is compared to the billion calls debt collectors make each year, the complaint rate is very small.”

ACA has continuously urged the CFPB to ensure that the complaint information it shares is based on meaningful, normalized data. In August 2015, ACA submitted comments to the CFPB in response to its Request for Information on data normalization, highlighting the particular importance of context when evaluating debt collection complaints and the critical need for the CFPB to develop and implement data normalization procedures.

This ACA International white paper is part of a larger research initiative to collect more original data about the credit and collection industry that quantifies the ways in which debt collectors help consumers and the overall economy.

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