The Consumer Financial Protection Bureau (CFPB) is a new government agency created to handle consumer complaints about deceptive or fraudulent companies. In the past I have advised clients not to waste any time filing a complaint with any government agency. The CFPB may change my mind, though the jury is still out.
Consumer Complaints with the Consumer Financial Protection Bureau
Consumers can file a complaint directly with the Consumer Financial Protection Bureau. In the past, consumers could file similar complaints with the FTC, FCC, and their State Attorneys General but those complaints rarely resulted in relief for individual consumers. Indeed, each of those agencies primary purpose in gathering complaints is to search for only the largest scams and even those are rarely pursued.
The CFPB however appears to be different. Filing a consumer complaint with the Consumer Financial Protection Bureau may actually result in a refund or other relief for the consumer. I say may because the CFPB is still very new and largely unproven.
Company Accountability
One reason why a consumer complaint with the Consumer Financial Protection Bureau may be good for consumers is because the CFPB contacts the companies involved and expects them to respond. This is similar to filing a complaint with the BBB but with the added backing of the federal government.
CFPB Data Sharing
Another advantage of filing a consumer complaint with the Consumer Financial Protection Bureau is that the CFPB shares data with federal and local law enforcement agencies. This should result in better prosecution for criminal acts and better enforcement in administrative proceedings. Shared data means less privacy for deceptive companies and less privacy makes it harder to defraud consumers.
CFPB Congressional Reporting
One area that greatly concerns me is that the CFPB reports to congress. No, this is not a good thing. Reporting to congress is highly likely to result in tighter regulations and more oppressive government restrictions. Yes, scam artists should be held accountable but no, congress should not get involved. When it does we get more laws, rules, and regulations which inevitably require higher taxation and less liberty. Simply put, congress should keep its hands off our business. Individuals, not government, should hold companies accountable if necessary.
Conclusion
Until we have more information about the Consumer Financial Protection Bureau we cannot know for sure whether or not it is a useful consumer tool or just another bloated, useless, oppressive government agency. My initial guess is that, on some level, the CFPB is both. Until we know for sure it would be prudent to file consumer complaints with the CFPB as one part of the consumer complaint process. A CFPB complaint, however, should not be used as a substitute for hiring a consumer protection attorney. Like the BBB the CFPB has no authority to enforce state laws protecting consumers and therefore cannot adequately represent consumers’ legal interests. For now, file the CFPB complaint but do it only after consulting with a good attorney for best results in your individual case.