January 12, 2011

Govt Adding Two New Complaint Outlets For Consumers

The U.S. government is ramping up its use of consumer complaint websites with two new outlets for customer gripes that have trade groups for manufacturers and financial firms concerned about smear campaigns and lawsuits.

The Consumer Product Safety Commission (CPSC) plans to go public on March 11 with a searchable database of consumer complaints about products.  The agency unveiled the project on Tuesday on its website.

The Consumer Financial Protection Bureau is also beginning to build a financial products complaint database that will be operable when the agency comes to life on July 21.

Industry associations have expressed concern that baseless or inaccurate complaints could taint reputations. They also resurrected the concept of class-action attorneys using the safety commission database to get new lawsuit ideas.

It is unclear how the financial agency's complaint database will be used.

White House special adviser Elizabeth Warren, who is helping to build the agency, has focused on it being "born digital."

An agency official said she hopes to build a high-tech complaint management system including a consumer telephone hotline.

Spokesman Alex Filip said in an interview with Reuters that the CPSC is limiting complaints that will be made public to those that present safety and health hazards.

It is not clear whether the new financial regulatory agency will go public with details about complaints they receive.

"We've got our own mandate and our own mission," the bureau official told Reuters.

The agency has started to reach out to some consumer legal experts for advice on how to best handle complaints.

The National Highway Traffic Safety Commission has a searchable database on its website at SaferCar.gov covering motor vehicles and related equipment, including child restraints.

Manufacturers have voiced concerns about the safety commission database, which the Consumer Product Safety Improvement Act of 2008 requires.

The National Association of Manufacturers argued that company trade secrets might be exposed, or that competitors could smear a company with inaccurate information.

"Plaintiffs and their lawyers may point to reports of harm, whether accurate or not, as establishing notice that a product was dangerous or as 'evidence' that a product caused injury," product liability law firm Alston & Bird warned in an advisory note to clients.

The advisory continued, "plaintiffs' lawyers may also use the database to search for targets of class action and other litigation."

The firm also advised that consumer groups and others may submit reports to further an agenda with regard to manufacturers, products and industries, and unscrupulous competitors might use the database to tarnish competitors.

However, Filip suggested that there were procedures in place that would prevent those things from happening.  He said that companies would get 10 days to respond to complaints before they became public.

Bankers have similar concerns about any possibility that financial product complaints could go public.

"A competitor could paint a competitor as a bad actor by throwing complaints at them without having any substance at all," Wayne Abernathy of the American Bankers Association told Reuters.

He also raised the possibility that identity thieves could use a public complaint database.

However, Abernathy said his industry would welcome a streamlined procedure for getting consumer concerns to cited financial institutions quickly.

Complaints about financial products could likely get different treatment than those involving consumer products as the law establishing the financial protection bureau does not require that complaints be posted publicly.

"I believe in public shaming," Ed Mierzwinski of U.S. PIRG, a consumer advocacy group, told Reuters. "But I want the bureau to help consumers and to use consumer complaints, and have the ability to add them up, and calculate who are the bad guys, so they can do law enforcement."

Consumers who want to vent their dissatisfaction with financial firms and companies do not have to wait for the Feds.  They can complain publicly on Twitter or post their gripes on independent complaint websites.


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