US Consumer Bureau Opens Online Credit Card Complaint DB

chiguy writes "The Consumer Financial Protection Bureau begins releasing detailed information on Americans' complaints about their credit cards online. From The Washington Post: 'The CFPB said it will only publish complaints after it has verified the consumer's relationship with the company. The new database will include not only the name of the company involved, but also the nature of the complaint and the consumer's Zip code. It will also report whether the firm responded in a timely manner, how the matter was resolved and any disputes. The CFPB said it has received more than 45,000 in the year since the bureau was launched.' Complaints about mortgages, student loans, and checking accounts will be added later. Financial institutions are complaining loudly, decrying the enforcement of one of the main tenets of the free market: transparency."

Comments

Seriously ?!?!?!?!

[zero.kalvin]

More and more I get this feeling of disgust each time I hear a company complain about something that has to do with consumer rights. At least I am getting more disgusted and not more desensitized...

Re:Seriously ?!?!?!?!

[SydShamino]

Next time you vote, remember which party created this bureau and which keeps try to block it or defund it. Despite what a big pile of slashdot users regularly say, there are still differences between the major parties.

Re:Seriously ?!?!?!?!

[geekoid]

You might want to read up.

well damn

[Tmann72]

Didn't know something like this existed. Time to add my recent problems to the list. With a credit rating of 720 there is no excuse for me to have a 23.9% APR. Fuck you Chase Freedom. Worse part was I would email them over a dozen times and get robo-responded each time with a message that essentially said they don't do credit report please contact experian or other such services. Worse still was that in my emails I told them I went there before applying to check my score. I even went so far as to add a screenshot to my email showing them my awesome score. I would repeatedly get the same robo-response regardless. Eventually I called them. They gave me a support number to call about my APR. The number ended up being disconnected. Chase can suck it. No one should get a card through them.

Re:well damn

[rgbrenner]

hard inquiries affect your score by 1 to 5 points. FICO also groups inquires -- so if you shop for a mortgage during a period of a month or so, all of those will be grouped together (and will affect your score the same as 1 inquiry)

http://www.bankrate.com/finance/credit-cards/how-credit-inquiries-affect-credit-score.aspx

Re:well damn

[Tmann72]

Incorrect sir. Having no credit means you have no credit history. When applying for loans they assume the worse and give you a bad interest rate. Having no interest is definitely not a good thing in any instance where a credit check is performed. The only way to get around it otherwise is to supply a very hefty down payment or to pay off these purchases instantly. Last I checked the income divide was pretty huge so I don't think that's viable for everyone.

Re:well damn

[a90Tj2P7]

False dichotomy. Credit isn't debt, it's the amount of debt they would trust you with. You don't have to be in debt to have credit.

Re:well damn

[operagost]

Didn't know something like this existed.

It's existed for decades: the BBB. I successfully had my APR reduced from 19.99 to 9.99 with Chase. When I was out of work, they jacked it up before I could close the account at a lower rate. My complaint with the BBB motivated them to restore good faith with me. They are still pretty low on my list of potential lenders, but they're not on the bottom. The BBB won't be able to fix everything, but let's be frank: neither will any government agency.

Re:well damn

[Loki_1929]

I've never understood the reasoning with why closing a 0 balance credit card should lower a credit score.

It doesn't necessarily; at least not immediately. Closing a revolving credit account with a zero balance changes your debt:total credit ratio among your revolving accounts. If you have a $0 balance on a $10,000 limit card and a $750 balance on a $1,000 limit card, and you then close the account for the $10,000 limit card, your total revolving credit utilization has gone from 7% (which is actually better than 0% usage) to 75%. Using 75% of your revolving credit is a major red flag that says you're over-extended and may be getting into trouble. FICO scoring has no memory when it comes to revolving account balances. It doesn't give you credit for going from 80% utilization to 10% utilization in a month; it merely gives you one score based on the 80% and one score based on the 10%. Likewise, it does not penalize you for going from 10% to 80% (though you'll take a hit just for being at 80% usage).

The other part of that comes in later. A fairly sizable chunk of your credit score comes from the average age of your credit accounts. Closing a high-interest revolving credit account won't affect your score today in terms of AAoA, but in a few years when that old, closed account drops off your report? Well now your average just got smaller and your score may have just taken a hit. The more accounts you have, the less losing one will matter. At the very least, it will likely eventually cost you a few points years later. However, if it drastically affects your utilization, you could see a big hit today, and if you don't have many accounts, you could also see a big hit years later when the closed account disappears.

You would think the credit tracking companies would look at you closing a high interest, high limit, card as a good thing.

Your credit report is a snapshot of where you are at the moment someone checks the report. The terms of your revolving accounts don't factor into the equation in terms of a basic credit score. They may for one of the niche scores (there are dozens and virtually nothing is known about them since consumers don't have regular access to them), but your basic FICO score has no idea whether a given card has great terms or bad terms. In terms of things like credit cards, it's looking for your debt:credit ratio on that account, your debt:credit ratio across your revolving accounts, and the age of that account (to factor into AAoA). It's also looking for any delinquencies on the account (30 days late, etc) and how recent they are. That's about it.

It's like saying paying off a mortgage should lower your credit score.

Paying off your mortgage has the effect of reducing the variety of credit accounts you have open. It's treated as a type of installment loan. If you have others (like an auto loan, student loans, etc), the impact will be pretty small.

In the end, what you need to understand is that the FICO score isn't about how smart you are, but about how likely it is you'll keep to the terms of credit extended to you at any given time. If you hold a mortgage, car loan, and several (very old) revolving accounts which are all in use and in good standing, you'll have a stellar credit score. If you've got collections, late payments, judgements, etc, then you're showing an inability or unwillingness to pay debts and your score will suffer. The area in between is basically left to showing how able you are to juggle a lot of different credit accounts and how responsible you are about not over-extending yourself just so you can have that dream vacation/new boat/etc. It's also important to remember that things like debt:income ratios, where you live, etc are NOT in your credit score. Your credit score is strictly a snapshot based on your current credit report and does nothing but measure the chances of you sticking to the terms of credit extended to you at that moment.

If you want to know more, you should visit the MyFico.com forums. The people there make a hobby out of understanding how all this stuff works.

Re:well damn

[Loki_1929]

My high credit score has enabled me to keep float about $13,000 at 0% over the past 3 years (it's all being paid off as I'm comfortable doing) while giving me an average of 2% extra cash in hand from my rewards card's cash-back feature. Further, it has me a car loan that'll cost me a whopping $400 in interest over the life of the loan. I've been able to do what I want, when I want, and I'm (literally) being paid money for the privilege.

There are people who let themselves become a slave to creditors and there are people who make creditors their bitch. Play the game right and you're golden. Have backup plans for your backup plans. Have contacts at the ready if anything goes wrong. Have reserves and make damn sure you can very easily afford what you're doing.

Re:well damn

[Loki_1929]

If you think of your credit rating as a metric of your utility as a customer for credit services, rather than as a metric of how good you are at paying off debts, it sometimes makes a bit more sense.

But that's wrong. It only makes sense when you look at the credit score for what it is: a measure of how likely you are to keep to the terms of credit extended to you at a given time. Anything else is hogwash and won't make sense when you know what goes into the score. People with middle-of-the-road credit are the best customers for credit services. They pay higher fees, higher interest rates, and often make a late payment or two (which adds even more fees and higher interest rates). People with very high credit scores often give creditors very little actual profit. You have to offer them super low rates with no fees and they generally aren't going to give you any further opportunities to get more out of them. They're a reliable source of very, very little income for creditors. As such, the credit score is a rating of how likely it is you'll stick to the letter of the agreement between you and the creditor for the life of the account (as of the moment when the score is pulled).

A level of responsibility/having-your-shit-together below a certain level is bad, because the chronically impecunious just don't have much blood to squeeze out. A level of responsibility above a certain level is also bad, because you are the credit-industry equivalent of those rational shoppers who come in, buy the loss-leader, and then leave that big-box stores loath so much...

Now this isn't entirely right either. Certain lenders deal only in certain arenas. Some have a niche dealing with bad-credit customers. They work in fees and rates that build in what basically amounts to default insurance for the company. They're willing to put up with x% defaulting because they have so much profit coming in from the people who are actually paying that it all balances out and they can make good money. You also have broad-base lenders (Honda's credit arm is actually one of these) who'll lend to just about everyone, letting everyone cover each other's risk via volume and slightly higher (but still pretty good) rates and fees. I've hardly ever seen a creditor operating exclusively at the high end. Those who do often serve the high rollers with outstanding credit and charge huge (relative to what I make) fees for crazy levels of service. Most creditors would rather have a mix of mid and high credit scoring customers. It allows them to balance risk and show a decently safe and stable balance sheet.

Flagrantly unreliable behavior tends to knock your score down; because it casts real doubt on your ability to pay within reasonable time, and the net present value of having loaned you money; but excessively virtuous behavior strongly suggests that you will just skip in and take advantage of the free loan, without ever tripping on any late fees or interest payments by which better customers pay for the service...

Actually, any unreliable behavior (30 day late, etc) knocks your score down in a hurry. Someone with a score approaching 800 might see a 30+ point drop from being 30 days late on any one given account. The problem with being perfect all the time is that any sign of weakness makes it look as though you may have a house of cards about to come falling down. Still, from a consumer's point of view, having that high score is always the best for you. Over about 760 or so (780 for some lenders), you'll have access to virtually free credit for nearly anything you want to buy. You still have to be smart about what you do and not assume you'll get perfect rates to match your perfect score. Your first offer typically won't reflect your score; you need to shop around to find the truly gorgeous offers.

Re:well damn

[Loki_1929]

Whether you're the master over your credit or your credit's the master over you depends entirely on your responsibility, self-control, planning, credit education, and decision making. I've been on both sides of that game. Educating yourself is the first step to taking control and keeping it. Making smart decisions means you'll have access to lots of money (relative to what you're making) at very little cost.

Re:well damn

[Loki_1929]

It's all a big guessing game anyway. FICO does not release the actual formula,

Not really. 35% of your score is payment history, 30% is amounts owed, 15% is your length of credit history, 10% new credit, 10% types of credit used. How all that plays in makes it fairly simple to get a rough (within about 20 points) calculation of someone's credit score based on their report. There's even a calculator right on MyFico.com (when you've bought a report and score) that allows you to look at all kinds of hypothetical situations (what if I miss a payment, what if I bought a house, what if I ...) and how they'll affect your score based on your existing report. We may not have the exact formula, but it isn't exactly rocket science.

and even though you can see the score from TransUnion/Experian/Equifax, the banks do not use the score from those agencies.

Well first of all, you can't buy a FICO score from Experian. They ended their relationship with MyFico years ago, which cut off consumers from the only place they could purchase the actual score. The only place I know of where you can still get your Experian score regularly is PSECU (you need to be a member with a bank account, then you get it monthly through the website). Secondly, Equifax has a FICO score available on their site, but it's very well hidden. The score they push on the main page is garbage. The best place to get your credit scores is directly from Fair Isaac Corporation, whose consumer website is myfico.com.

Secondly, the banks (nearly all of them) use FICO for their lending decisions. It's important to remember that there are different niche formulas for FICO scoring beyond the basic one. There's one for credit cards, one for auto loans, one for mortgages, etc that change the weighting a bit. They're still based on the base FICO scoring model; they just weight things slightly differently. Not all lenders use those flavors and most will tell you if you contact them. In any event, it's not terribly difficult to estimate how the weighting will affect your score if you know the base score.

They calculate it themselves, and they can use a different weighting in the formula.

This is incorrect and it'd be silly for them to try. Fair Isaac Corporation's one product is the FICO scoring formulas. It's what's kept them in business for over 50 years. The credit reporting agencies gather the data and Fair Isaac Corp runs that data through a formula to spit out a score that tells creditors how likely it is that you (someone they've never met and know nothing about) will stick to the terms of the agreement if they extend credit to you. That's how it works. Now, a bank offering you a credit card might pull the FICO score that gives slightly higher weighting to revolving credit accounts and a bank (I should say creditor, as banks aren't the only ones by far) offering you an auto loan might pull the FICO score that weighs those types of installment loans more heavily, but the base formula remains unchanged and we know enough about that to know basically what the creditor will see when they pull the score if we know what's on our credit reports (which we have a right to, in the US, by law).

Also, FICO is not the only scoring company. VantageScore, NextGen, BEACON, and EMPIRICA.. to name a few.. and your bank can use any of those for your account.

So even if you know your credit score... you don't really know your credit score.

So much fail. We'll come back to Vantage in a moment. NextGen is the name of the latest FICO scoring model. BEACON is the old name for Equifax's branding of the FICO formula applied to their reporting data. For NextGen FICO scores, it's actually now called pinnacle. Empirica is the old name for TransUnion's branding of the FICO formula applied to their reporting data. For NextGen FICO scores, it's now called Precision. It's all still FICO and they're all using the exact same FIC

Epic fail

[vlm]

Financial institutions are complaining loudly, decrying ...

The real complaint is they paid billions to elect these guys, and look what happens. My suspicion is within days / weeks this will be defanged. Perhaps you'll only be able to look up complaints if you're already a customer of that bank, or it'll be made illegal to refer to these complaints in any way in advertising, or perhaps the names of the companies will be censored from public view, etc. I bet a simple hack to prevent citizens from using it would be the "only publish complaints after it has verified the consumer's relationship with the company" clause, whoops we have no budget this year for any verifications, what a surprise, I guess we can't publish anything this year... or ever. Another simple hack would be to prevent lookups solely by company name, must specify company name AND zip code AND mom's maiden name or something like that.

The new database will include not only the name of the company involved, but also the ...

consumers account number, PIN number, CVW number, SS number, and mothers maiden name. Wanna bet that it'll be, at most, a select query on the same server as the sensitive personal stuff is stored? And they'll be people uploading complaints named "Bobby tables" within hours of opening. This may be part of the scheme above... complain and everyone on the net can hear about it, but all of your personal data will be on a torrent site within hours, so you better not complain in public after all, serf.

consumer ... consumer ...

I hate being called a consumer. The article is about modern day debt-serfs anyway, not consumers. I want to be a citizen, you know, with like rights and stuff. Just like you know anyone using the N-word probably isn't worth listening to, anyone using the C-word probably isn't worth listening to. (Cloud is another good C-word to ignore)

Re:Epic fail

[SydShamino]

The real complaint is they paid billions to elect these guys, and look what happens. My suspicion is within days / weeks this will be defanged.

If Republicans win this fall, expect the consumer bureau to be gutted then eliminated. It's not like they haven't already been trying to block or defund it.

This is why the big banks hate the CFPB

[dkleinsc]

The last thing the larger financial companies want is clear documentation of exactly how they screw their customers. Just by sharing this kind of information, they start making the market compete better - now that customers are basically talking to each other, they know that Capital One is a bad deal, which will hurt Capital One in the marketplace.

Of course, I know that there are some who's head will explode when they encounter a government program that is quite cheap, effective, mostly non-coercive, and improves market functioning, but that's what this is.

Re:This is why the big banks hate the CFPB

[vlm]

they know that Capital One is a bad deal

As a non-customer of cap one, for years (decades?) they sent me bi-weekly physical mail spam trying to get me to sign up. I worked at a commercial printing shop that occasionally printed and even mailed paper spam 20 years ago and I figure they're in the hole at least $500 cost of sales on me, so if I ever become a customer there's probably some data mining process that'll find some way to make $500 plus a hefty profit off me. Those TV commercials are not cheap either. I fail to imagine how anyone could think they'll be a good deal, other than maybe some momentary bait and switch sales tactic.

Any time you see a cost of sales of $X realize unless they're a charity or political campaign (I'm looking at you, Ron Paul) they expect to earn n * $X gross profit where n is probably pretty big.

God Forbid

[AngryDeuce]

The horror of an informed populace...

Funny, they can submit information to credit agencies that are applied to every adult in this country, but turn around and give the people an outlet to do the same thing in return and now they're sobbing into their cereal. Boo fucking hoo.

Interesting but...

[PerfectionLost]

There only seems to be around 100 complaints in their database. That couldn't possibly be right could it? Or have I been wrong about how terrible the banks can be.

Here's a quick query I threw together:

Complaints by Company
1 TD BANK
1 Zions First National Bank
1 USAA Savings
5 Barclays
6 Amex
7 Wells Fargo
8 Discover
9 GE Capital Retail
15 Bank of America
24 JPMorgan Chase
27 Citibank
33 Capital One

Banamex / MasterCard

[John Bokma]

I live in Mexico for nearly 9 years now. Last November my Banamex bankcard got stolen. This was reported in less than an hour at a nearby "sucursal" of Banamex (in the same shopping mall). A few days later my wife and I discovered that about 27,000 MXN (about 2,000 USD) had been withdrawn in two shops in the time between the cards got stolen and reported.

So we went to the bank to report this. We talked to the bank manager (or supervisor), since we had talked to him earlier how to get money. Once your card is blocked you can only get money in the bank with identification, a copy of your contract (which they had on electronic file), and max. 3000 MXN (about 219 USD) for "security reasons" (right). Anyway, he couldn't care less, or that was our impression, but we ended up with a nice lady who really wanted to help us out, but was powerless against the unbelievable crappy way Banamex deals with customers in cases like this.

There are two ways to report incidents like this: the "fast" way: reporting it by phone. And the slow way (or in my current experience the "forget about it" way) by paper. We were allowed to use the bank's phone, so we called Banamex. And called. And were put on hold. And when finally someone who could speak English was found -- I don't speak Spanish very well -- I was put on hold, or got disconnected (again). After 4 (!!!) hours of this we had to leave the bank since they really wanted to close down.

We also went to one of the places they had shopped: Sam's Club. While we asked how it could happen that people could shop with my card the guy told us happily about how cards are cloned. I got the impression he was more into how cool this all was and what not instead of how "cool" is was for us, just before Christmas. Anyway, we learnt that 2 iPads had been bought at Sam's.

The next day we went to the bank building I had opened my account with. After 2 hours of more of the same, and worse; at one point I talked to someone in English who plainly stated she couldn't help me after it had taken nearly 20 minutes to get transferred to her, we decided to take the slower paper route. We filled in a form, I signed it, and hoped for the best. This was the 2nd of December

Right now? Still no money back. Even in Mexico the banks are insured for fraud (Banamex for 72 hrs after theft, if I understand correctly). We have contacted Banamex in every possible way, even via Facebook. I have contacted MasterCard, it's their shiny logo that's on my bankcard, but while they told they would escalate things with Banamex so far nothing has happened... Last resort seems to be CONDUSEF, but this being Mexico I don't have a good feeling about this (I do have some experience with PROFECO; an organizations that seems to "protect" consumer's rights).

What surprises me is the piss-poor "security" of bank cards. They are cloned in seconds, and it wouldn't surprise me if the data is transferred via the Internet to a different location; the trip from the mall were the card was stolen to Sam's Club, where the iPads were bought, takes probably 10+ minutes and what I recall from the time stamps they got there unbelievable fast.

A lot of companies get away with a lot. I don't understand why MasterCard can't put more pressure on Banamex; it's their logo on the card that got stolen. Is this logo just a meaningless shiny sticker? And I don't understand by Banamex behaves this piss poor; they are insured.

Re:Banamex / MasterCard

[Loki_1929]

I feel bad you've had such a bad experience with that bank. They sound like a bunch of assholes, honestly.

To add a different story to this, a friend of mine in the US had his debit card (bank card) cloned at a shady gas station. They managed to get $1,000 out of the ATM (the max they could) that night. He quickly saw it and reported it. The bank killed the card and he had his money back (they didn't even charge him the $50 you're technically liable for) within about 24 hours.

Just mentioning it so that people understand the importance of shopping around for their bank/credit union. You have some places that really care about their customers (even the little guys who aren't pulling a half million a year in business) and you have some places that couldn't give a damn less unless you're rich.