Since last year, American consumers with complaints now have a choice between the Better Business Bureau (BBB) and the Consumer Protection Financial Bureau (CFPB). That choice is based on where consumers think they will get the most help.
The BBB and CFPB are bureaus that handle consumer complaints but they have different objectives. The purpose of the BBB is to collect information on the reliability of businesses, alert consumers and businesses to fraud, provide information about ethical business practices and act as a mediator between consumers and businesses in disputes (http://www.bbb.com/us). It also advocates for truth in advertising.
In contrast, the CFPB promotes fairness and transparency for mortgages, credit cards and other consumer financial products and services. Their “central mission is to make markets for consumer financial products and services work for Americans-whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products“ (http://www.consumerfinance.gov/the-bureau).
How does one choose between the BBB and the CFPB?
The BBB is not affiliated in any way to any government agency. It does not have the force of the law behind it. The CFPB on the other hand, is a federal agency with jurisdiction over banks, credit unions, securities firms, pay-day lenders, mortgage servicing operations, student loan providers, money transfer agencies, foreclosure relief services, debt collectors and financial companies. It has the power to investigate and force compliance with the law.
The CFPB only covers consumer financial products and services whereas the BBB covers all businesses. Car dealers (that lease, sell and service vehicles), merchants and retailers, real estate brokers, accountants, tax preparers, lawyers, manufactured and modular home retailers are outside its jurisdiction as long as their activities don’t drift into consumer financial goods and services.
The CFPB is an independent unit inside the Federal Reserve whereas the BBB is a privately owned consumer watchdog group that charges fees to its members. It has been accused of charging mediation fees and having bias towards fee paying businesses in its ratings.
One advantage of the BBB over the CFPB is that it extends beyond US borders into Canada. The BBB also gives information about charities if you want advice on how to choose a charity to donate to.
The CFPB has services for older Americans whereas the BBB does not have age specific services.
As a consumer if you want some general queries about a business it is best to approach the BBB in your area. If you want to get a loan, mortgage or any consumer financial goods or services or you feel you have been shortchanged in any way, it advisable to choose the CFPB.
Think about what you want to do, the kind of information you would need, then decide which bureau to approach. You can get advice from both bureaus.