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Credit card companies named and shamed on watchdog's new online resource

by Peter Andrew

The Consumer Financial Protection Bureau (CFPB), a Federal watchdog, published the online complaints it receives from members of the public about credit cards. The new service, launched on June 19, does not show information that could identify individuals, but can be searched by ZIP codes. It also reveals how card issuers have responded to each complaint.

When USA Today covered the story back on June 14, it pointed out that the CFPB isn't the first public body to allow consumers to view other people's complaints. The National Highway Traffic Safety Administration and the Consumer Product Safety Commission both have well-established online resources that allow anyone to search for safety issues about vehicles and household products respectively.

Credit card companies outraged

Credit card issuers are vehemently opposed to the new database. USA Today went on to quote Carol Kaplan, a spokesperson for the American Bankers Association:

"Until somebody has had a chance to sort though [sic] it and figure out what's valid and invalid, it's a gossip column… It might as well be Yelp."

You can understand banks' concerns. Any organization that has literally tens-of-millions of customers is pretty much bound to have alienated a significant number at any given time. Even the very best credit card companies, the ones -- such as American Express and Discover -- that often top consumer surveys for their high levels of customer service, have plenty of people with genuine beefs about them.

Bankers are likely to be worried that prospective customers are going to visit the CFPB site, read unverified horror stories, and then be put off making an application.

Too late?

The trouble is, the genie is not only out of that particular bottle. He has granted his wishes and retired to a Palm Beach McMansion.

The Internet already makes it simple to check out all sorts of products, just by adding "complaints" to the brand name in a search engine. Anyone with any sense will read the resulting consumer comments with a hefty pinch of salt, taking seriously only very similar ones from very many people.

The real nightmare for bankers would be statistical data about complaints, although even these compilations have limited use. On Jun. 19, BusinessWeek reported that the CFPB had, as a result of a public records request, released a breakdown of the banking complaints, most of which concerned credit cards, that it received between July 21 and Dec. 31, 2011.

Choosing a new credit card

It turns out that Bank of America headed the list. But BusinessWeek made a telling point: "The number of complaints was roughly consistent with the size of the banks' credit card business." This, you may think, suggests that credit card companies are all approximately as good or as bad as each other.

So, when you come to choose new plastic, you probably shouldn't take too much notice of other people's experiences. Instead, seek out the best credit card for your needs and lifestyle, based on the same old criteria: rates, rewards, perks, offers and the likelihood of your getting approved.

Published 06/19/12 (Modified 07/11/12)


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