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Institutions should include CFPB's database in risk assessment

By Tabitha Fleming | Feb 24, 2017

WASHINGTON (Legal Newsline) – The Consumer Financial Protection Bureau’s website could be used as a data-mining tool for plaintiffs attorneys, says Douglas Thompson of Bryan Cave.

Thompson, a managing partner in the firm’s Los Angeles office, recently wrote about the information available on the Consumer Financial Protection Bureau website, and the importance of incorporating CFPB information into risk management plans.

“Institutions are presumably looking at their own customer experience and trying to make it the best that it could be, but part of the framework I think that institutions ought to be looking at is 'What does your regulator see?’ and ‘What can third parties who may have an axe to grind against you see as well?’ and so the CFPB is unique in that the complaint and information is fully publicly available," Thompson told Legal Newsline.

That publicly available information includes consumer narratives that may or may not be factually correct. While the CFPB information is readily available to the public, Thompson notes that the agency makes an effort to redact some information, especially to protect consumers and employees of various financial institutions or other businesses. Still, the information could have major impacts in class action litigation.

The Federal Trade Commission also logs consumer complaints, yet the complaint and response information there is somewhat less readily available to the general public. What makes the CFPB different is the level detail available to the public via an easy-to-use website.

“It’s very detailed, so I think it’s a qualitatively different type of information available than with frankly any other federal regulator,” explained Thompson. 

“The age of big data and big information is upon us, I don’t know that we can go back and undo it. So I think that business has to change its approach to understand that all types of this information is out there.”

With consumers more often turning to the internet for all their information needs, the complaints and institutional responses logged in the CFPB may have a causal effect on consumer relations, that is to say, consumers who read complaints may expect mistreatment from an institution. 

That could result in verbally combative consumers who contact the institution, or even consumers choosing to take their business elsewhere. The plaintiffs bar is certainly paying attention, even if consumers aren’t.

“Whatever is publicly available, plaintiffs lawyers can find, and can leverage and can utilize," Thompson explained. "I have been involved in a number of class action cases for clients where in negotiations, or mediation sessions, plaintiffs lawyers have said, ‘We believe this is appropriately a class action matter because we’ve seen all these complaints on XYZ website and they all relate to the topic of the subject of the suit, and so that anecdotally demonstrates that this should be a class action.’”

Thompson and other members of the defense bar argue that each alleged instance of harm would need to be evaluated on an individual basis. Regardless of the argument, the ability of the plaintiffs attorneys to simply present complaint information in court could impact businesses.

“It creates and environment where, if a plaintiffs lawyer brings (CFPB complaints) into court and includes it as part of the environment, and the court or the jury sees the information, does that potentially impact institutions? I would say it may, because it’s not just about that instance, or that individual consumers case at that point,” Thompson said.

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Organizations in this Story

Consumer Financial Protection Bureau U.S. Federal Trade Commission