New Federal website shows complaints about mortgage lenders

Thanks to the Consumer Financial Protection Bureau, there is a new website for narratives of consumer complaints regarding mortgage lenders:

The bureau logs each complaint by category in a publicly viewable database and gives the company that is the subject of a complaint time to respond via a nonpublic online portal connecting it with the consumer through a bureau intermediary. In the past three years, according to the bureau, it has received and worked on more than 627,000 complaints. They range from alleged harassment by debt-collection attorneys, to foreclosures, student loan defaults and poor treatment of customers by loan servicers. Roughly 28 percent of all complaints filed to date have been about mortgage issues — the largest single category. What’s been missing, though, has been any real detail about the troubling circumstances that triggered the complaint in the first place expressed in the customer’s own words.

Starting in late June, that all changed. The bureau began posting what it calls “narratives” that name the bank or company involved and go into sometimes excruciating detail. Allegations get pretty serious — charges of lending fraud, violations of federal regulations and illegal overcharges. Some are heartfelt, such as one from a Virginia homebuyer whose closing was repeatedly delayed by the bank: “Who compensates us for the loss of income for the days taken off from work (to attend closings)? For the movers that have been scheduled? For the pre-move-in renovations that cannot now be done because the contractors are fully scheduled for the rest of the summer?” (To see the narratives, go to

The first batch of 7,700-plus narratives was posted June 25, including hundreds of mortgage complaints. The consumer’s name and address — other than state of residence — are redacted, as are all details the bureau or the consumer considers ?private.

Lenders are not permitted to post their own narratives, but instead must use one of several stock responses, such as “company can’t verify or dispute the facts in the complaint” or “company believes it acted appropriately as authorized by contract or law.” Lenders can also decline to participate in the narratives process by saying, “Company chooses not to provide a public response.”

The article suggests two large threads emerge from the complaints: dislike of being placed in customer service hell without getting answers from anyone and problems with escrow accounts.

Not surprisingly, lenders are not happy with this information on the website. The issue is similar to that which plagues many online reviews: how can businesses or readers be sure that the story or review is credible? Yet, this certainly puts more information on the side of consumers and this is needed in an industry that holds so much debt for so many people.

These narratives posted online would make for some good coding opportunities for social scientists…

Americans have more TV channels than ever and still just watch 17.5

A new report from Nielsen shows Americans have more TV choices than ever and still watch on average 17 channels:

Americans have no shortage of options in every aspect of their lives. The proliferation of devices for consuming content has enabled more choices than most can count. But the “problem” of having too many options—including a growing expanse of content—doesn’t seem to be having an impact on our TV viewing preferences.

According to Nielsen’s forthcoming Advertising & Audiences Report, the average U.S. TV home now receives 189 TV channels—a record high and significant jump since 2008, when the average home received 129 channels. Despite this increase, however, consumers have consistently tuned in to an average of just 17 channels.

This finding might fit with research that shows giving people more choices in life doesn’t necessarily equate with happier outcomes. Sixty more channels may sound great but who has time for them or is interested in all of their content? It would also be interesting to look at the programming of these 60 new channels as I suspect many of them contain niche programming or may duplicate what is available elsewhere.

One way I think about this is how many DirecTV channel numbers I have memorized. With all of the possible channels, I still have to occasionally look up channel numbers – like last night when the Blackhawks-Wild game was on CNBC. At least DirecTV groups channels of common themes together so it is easier to flip around. I never did understand why Comcast put certain unrelated channels next to each other.

Chicago Tribune editorial against “survey mania”

The Chicago Tribune takes a strong stance against “survey mania.”

Question 1: Do you find that being pelted by survey requests from your bank, cable company, doctor, insurance agent, landlord, airline, phone company — and so on — is annoying and intrusive?

Question 2: Do you ignore all online and phone requests for survey responses because, well, your brief encounter with a bank teller doesn’t really warrant a 15-minute exegesis on the endearing time you spent together?

Question 3: Don’t you wish that virtually every company in America hadn’t succumbed to survey mania at the same time, so that you’d feel, well, a little more special when each request for your precious thoughts pings into your email?

Question 4: Do you wish that companies would spend a little less on surveys and a little more on customer service staff, so that callers would not be held captive by soul-sucking, brain-scorching, automated answering systems in which a chirpy-voiced robot only grudgingly ushers your call — “which is very important to us, which is still very important to us” — to a human being?

Question 5: Do you agree that blogger Greg Reinacker laid out some reasonable guidelines for companies that send surveys to customers: “Tell me how long it’s going to take. Even better, tell me exactly how many questions there will be. … Don’t ask me the same question three different ways just to see if I’m consistent. … If you really, really want me to take the survey, offer me something. I’m a sucker for free stuff. And a drawing probably won’t do it.”

Question 6: Do you think companies should be aware that a pleasant experience — a flight, a hotel stay, a cruise — can be retroactively tainted by an exhausting survey and all those nagging email reminders that you haven’t yet filled it out?

Question 7: Do you find it irritating when a salesperson tries to game the system by reminding you over and over that only an excellent rating for his or her service will suffice … before said service has been rendered to you?

Question 8: Do you agree that there are ample opportunities to put in a good word for, say, an excellent waiter or sales clerk or customer service agent (just ask to speak to his or her supervisor!), which is much more sincere than you unhappily trudging through a long multiple-choice online questionnaire?

Question 9: Are you aware that marketing professors tell us that these surveys can be vitally important for companies to improve their service and that employee bonuses and other incentives hinge on whether you rate their service highly or not? We’re dubious, too, but just in case it’s true … would you please tell our boss how great you think this editorial is? Use all the space you need.

We get it – some people think they are being asked to do too many surveys. At the same time, this hints at some larger issues with surveys:

1. Companies and organizations would love to have more data. This reminds me of part of the genius of Facebook – people voluntarily give up their data because they get something out of it (the chance to maintain relationships with people they know).

2. Some of these problems listed above could be fixed easily. Take #7. Salespeople can be too pushy in trying to get data.

3. Some things in #5 could be done while others listed there are harder. It should be common practice to tell survey takers how long the survey might take. But, asking about a topic multiple times is often important to see if people are consistent. This is called testing the validity of the data.

4. I think more consumers would like to receive more for participating in surveys. This could be in the form of incentives, everything from free or cheaper products or special opportunities. At the least, they don’t want to feel used or to feel like just another data point.

5. Survey fatigue is a growing problem. This makes collecting data more difficult for everyone, including academic researchers.

All together, I don’t think the quest for survey data is going to end soon because customer or consumer info is so valuable for businesses and organizations. But, approaching consumers for data can be done in better or worse ways. To get good data – not just some data – organizations need to offer consumers something worthwhile in return.

What people see when they read home loan disclosure forms

A new study uses eye-tracking devices to look at what people actually see when they read mortgage documents:

Choplin, along with Debra Pogrund Stark, a law professor at John Marshall Law School, and DePaul graduate student Mark LeBoeuf, conducted three eye-tracking experiments on 50 people to see if the various changes made to the government-mandated home loan disclosure forms made it easier for people to understand and retain critical information.

Their research found that the forms introduced in 2010 were generally better than the 2008 versions, so long as consumers are given the chance to read and digest what they’re reading. Their findings showed that people are much less likely to recall the initial interest rate, the maximum interest rate and the maximum monthly payment if they are distracted…

“The problem is if people are talking over it,” Choplin explained. “We believe mortgage brokers are initiating (the conversation).”

But even with silence and better forms, consumers still aren’t protected from potentially predatory lending, the researchers concluded.

That’s because they found that while better disclosure forms might alert consumers to changing interest rates and payment terms, none of the people in their study commented on how an adjustable-rate mortgage might affect the loan’s future affordability.

This sounds like an innovative way to use eye-tracking software. And it looks like the new forms do help some. But, perhaps they don’t go far enough in pushing consumers to ask the right questions about what it all may cost down the road. Simply seeing something on the page is helpful but doesn’t necessarily lead to comprehension and the next logical questions.

It would be interesting to then ask the mortgage brokers why they talk while people are trying to read the forms. A malicious answer is that the brokers don’t want people to consider them too closely. Or perhaps it is that the brokers, like a good number of people, have a hard time keeping silent for even more than 5 or 10 seconds. I’ve seen this in action many times myself – if you try to give a bill or form to sign a good look over, it seems to make the people waiting for you nervous even though the form is supposed to help you be better informed.

The Main Streetification of shopping malls

Perhaps you have seen the advertisements for Small Business Saturday – it will be fascinating to see if this campaign works. While the national retail market is not good overall, this piece suggests that “Main Street [is] making a comeback at the expense of the shopping mall.”

In short, the most successful malls usurped the role of Main Street as the commercial and even cultural center of the communities they served.

Now, however, many shoppers want Main Street back.

Development of new malls has almost completely stopped, with only two being erected in the country since the beginning of 2009, according to the International Council of Shopping Centers.

Outdoor town center concepts, featuring brick sidewalks, streetlights and even public clocks evoking the Main Street of yore, are climbing to a degree that many owners of enclosed malls are considering dramatic makeovers, some including plans to tear off the roof of, or “de-mall” enclosed shopping centers.

I feel this headline is a bit misleading: we’re not talking about a return to traditional downtowns. Rather, it is taking older shopping malls and adding “older” elements, creating a 21st century facsimile of what retailers and Disney want you to think old downtowns were like (but with modern amenities). This isn’t that different than the strategies a lot of older downtowns have pursued in order to become a little more mall-like. Perhaps the real story here is that we are moving toward an amalgamation of shopping mall and downtown where people want to purchase the latest and greatest but really feel like they are in a community setting. Perhaps we could call these new facilities “Main Street malls.” (Though I wonder how these are different from some of the new “lifestyle centers,” particularly the New Urbanist ones.)

I am a little miffed that the article provides little evidence that shoppers really want “Main Street malls.” Are developers not building malls because they are not needed or have the tastes of shoppers changed?

“What’s Your Problem?” misses an opportunity to explain survey research

The “What’s Your Problem?” column in the Chicago Tribune tackles the problems of consumers. Yesterday’s column involved a woman who had been called multiple times by a survey firm even after she asked to not be called again:

Over the following weeks, Scarborough representatives called Riedell repeatedly, asking her to participate in a 15-minute phone survey.

No matter how many times she refused their overtures, the calls kept coming.

Riedell said she asked each time to have her name taken off the call list but was told that representatives were not authorized to do so.

And so it continued through late summer and early fall. By the sixth call, Riedell decided she had heard enough. She emailed What’s Your Problem?

When contacted by the Tribune, the survey firm had this reponse which did not please Riedell:

Dercher said Riedell did not leave her name and phone number when she called Scarborough’s toll-free number, which are critical pieces of information so that the company can remove a respondent from the calling list.

Although her number could be randomly picked for another survey in the future, the odds are against that happening, Dercher said.

After reading Dercher’s email, Riedell said Scarborough’s response was, well, lame.

“The response says that their interviewers are not allowed to remove the name of a respondent from their calling list since the respondent’s name is confidential, but the interviewer already has the respondent’s name and phone number, otherwise they wouldn’t have been able to reach me by phone or address me by my name when I answered the phone,” Riedell said. “Sounds like gibberish to me.”

The column is clearly geared toward Riedell’s point of view and frankly, who likes to be called repeatedly by companies or survey organizations after refusing to participate? At the same time, let’s flip this around to see it from the opposite angle:

-Riedell was selected for the survey by random digit dialing. This is not unusual and telephone surveys are not covered by the Do Not Call registry.

-It doesn’t sound unusual that the survey interviewers didn’t have the power to remove her name from their lists. They were likely handed lists of numbers and told to call until they had an answer.

-Surveys often select their initial batch of respondents and then do whatever they can to get responses from them. The US Census Bureau goes to housing units repeated times in order to collect data because they want accurate data. (Of course, one Census worker who was doing his job last year was arrested for trespassing in Hawaii.) If survey companies simply gave up on people after one attempt, they would spend a lot more time and money and doing so might mess up their calibrated samples which are meant to represent larger populations.

In the end, Riedell may not like the system but in order to collect good data, survey companies may have to contact selected respondents multiple times. Since participation is voluntary, Riedell can opt out and perhaps Scarborough does need to have a more clearly delineated method by which people can opt out. Additionally, there may be some complications because Scarborough is a market survey research firm (tagline: Scarborough Research measures our shopping, media, and lifestyle behaviors) and are not academic researchers or political researchers (though push polls are very problematic). But this column could be much more informative about how survey research works and how consumers can respond to common requests for information rather than just suggesting that this woman should be able to more easily avoid telephone survey questions.

Why many products are always “on sale” – and why buyers fall for it

My wife and I had a running joke going for a while with the Kohl’s circular that would come in the Sunday newspaper: every week was “the biggest sale of the year!” This is a common strategy for many retailers and consumers continue to fall for it:

“People don’t have a gut sense of absolute value. It’s just that they’re sensitive to contrast. So if you say I’m getting 40 percent off, I’m interested, no matter what the actual cost is.”

“The whole concept of a sale or a discount has become really perverted,” said Shell, a co-director of Boston University’s Center for Science & Medical Journalism and a contributing editor to Atlantic Monthly. “So what is the price? We think of price as a number, something that’s coolly objective, but it’s not. It’s a highly emotional construct. Price is manipulated to attract the consumer.

“If people see a sweater on a table for $50, they don’t buy it. If they see the same sweater was once $100, they will. We’re highly swayed by reference price. … There are some things that are almost perennially on sale, like mattresses and jewelry. We buy almost all our clothing on sale.”

“Retailers are now outfoxing consumers,” said Kit Yarrow, chair of the psychology department at Golden Gate University, where she is a jointly appointed professor of both psychology and marketing. “They’ve figured out how to offer a bargain in a way that the consumer doesn’t even know what they’re buying anymore.”

So how could consumers fight back? Some common strategies:

1. In certain areas, like credit card offers and statements or the calories in restaurant meals, having sellers display more information so that the consumer can theoretically make more rational decisions based on more information. Do all consumers use this information? Does the extra information “wear off” over time, particularly in light of enticing promotions or marketing? You can hear the same argument about health care from some people – if everyone knew, doctors and patients, how much every test or treatment was going to cost, different choices would be made.

2. Use an envelope system (or a debit card) for spending money so that one has a better idea of the total spending limit. This may help overspending but does it help eliminate all “impulse buys” or the deals one purchases?

3. Aren’t consumer education classes in high schools supposed to help talk about finances and such? And do they help much? Do such classes typically talk about how marketing works and different ways to think about deals?

4. There are companies that claim to not offer deals and have “no-haggle prices” or something like that. Think of CarMax or Saturn. Since most other retailers do offer deals, some companies can take an opposite tack.

The conclusion: prices are a social construction and taps into basic human impulses to avoid losses (paying the higher price)

Sociologist suggests celebrity chefs can help limit food waste by promoting uses for leftovers

It is common to find food waste demonstrations in college cafeterias where students fill large receptacles with their leftover food. A sociologist argues that people need better models for how to use leftover food to limit food waste:

Sociologist Dr David Evans, from The Sustainable Consumption Institute at the University of Manchester, says the pressure to cook meals from scratch using fresh ingredients while enjoying a variety of dishes throughout the week can actually lead to waste.

His qualitative study – in which he went into the homes of 19 Manchester households – helps explain why Britain throws away enough food each year to fill Wembley stadium ten times over…

Current levels of food waste, he argues, should be viewed as the fall-out of households negotiating the complex and contradictory demands of their day-to-day lives.

For example the pressure to cook and eat in the ways that celebrity chefs advise means that a lot of food is already at risk of getting thrown out.

He said: “A lot of so-called proper food is perishable and so needs to be eaten within a pretty narrow timeframe. Our erratic working hours and leisure schedules make it hard to keep on top of the food that we have in our fridges and cupboards…

People with influence – like celebrity chefs – he says, should acknowledge these issues and think about ways of making it socially acceptable or even desirable for us to eat the same meal several nights in a row or use frozen vegetables.

It sounds like this sociologist is suggesting that it is unfashionable and unreasonable right now for most consumers to eat all of the food that they have prepared.

1. I assume the fashionable aspect has to do with the image that food needs to be prepared fresh for every meal. This is what cooking shows typically demonstrate but it would be rare that home cooks could cook an exact amount at each meal. Could the Food Network really sell a show solely built around dressing up or using leftovers?

2. The second part of the argument is that life is too hectic for consumers to really eat all of their food. Couldn’t meal planning help here? (Or perhaps they need Ziploc bags to limit waste as an ad I just saw on TV suggested.)

Overall, this sociologist is arguing that we need a cultural shift regarding leftover food and the place to start is with important cultural figures/gatekeepers who can make it cool to not waste food. This is an interesting solution compared to the work of someone like Michael Pollan who suggests the answer to food issues lies more in rethinking our relationship to food and slowing down when we make and eat food.

International Furnishings and Design Association survey also suggests McMansions are on the way out

A number of commentators have suggested the era of McMansions is over. A new survey of the American members of the International Furnishings and Design Association agrees with this prediction. Here are some of the findings:

-Americans will be living in smaller spaces with fewer rooms by the year 2020, say more than 76% of IFDA members. Eleven years ago, only 49% foresaw less living space in our future…

-Separate rooms are disappearing; they are blending into spaces that serve many different purposes, believe 91.5% of the design experts – which is exactly what they foresaw back in 2000.

-Furniture also is going multipurpose, say 67.5% of the the IFDA forecasters. They see modular, moveable, and smaller-scaled furniture overtaking built-ins and big pieces. There will be more interest in ergonomic designs – designed to fit the human body – but almost none in furniture designed to be disposable…

-Everyone’s working at home. A home office is a given, say more than three-quarters of the respondents, but here’s the news: Nearly 40% of the forecasters see more than one home office under every roof…

In summary: leaders in the furnishings and design field think that Americans will be living in smaller, more multipurpose spaces.

Several questions regarding these survey findings:
1. How much do those surveyed get to set and sell these product changes in the years to come?
2. If the economy improves dramatically in the next few years, are all these predictions moot?
3. How long before these predictions and ideas become the norm set before average Americans in places like furniture showrooms or on HGTV?
4. What do you do with previous findings of the survey?
a. For example, in 2000, roughly half surveyed thought Americans would be living in smaller spaces. The actual Census numbers about new single-family homes: on average, they were 2,266 square feet, 2,438 square feet in 2009, and 2,392 square feet in 2010. This is still a net gain over most of the decade with a dip between 2008 and 2010. So half of those surveyed in 2000 were wrong?
b. The predictions about the drop in separate rooms were the same now as in 2000. Were they right?
c. If those surveyed can be wrong, what does it mean? Do their companies/firms lose money because they mispredicted the future? Is it really difficult to predict the directions in this particular field and anticipate what the American consumer wants?