Beware CFPB ‘mystery shoppers’

by Ryan Smith08 Nov 2016
The CFPB is now using “mystery shoppers” to make sure lenders are sticking to compliance rules, according to a report at PowerSports Finance.

Mystery shoppers pose as consumers and apply for loans, Molly Calkins, partner at Akerman LLP’s Consumer Financial Practices Group, told PowerSports Finance.

“For example, they will send in pairs of equally qualified borrowers, one white and one non-white, to see whether the minority applicants were treated worse, given a higher interest rate, or the denial rate is higher,” she said.

The agency’s use of mystery shoppers – a tactic used by other government agencies for decades – first came to light in June, when the CFPB and the Department of Justice took action against BancorpSouth for allegedly discriminating against minorities who applied for mortgages.

The bank agreed to a $10.6 million settlement, but disputed the use of mystery shoppers.

“We have concerns with the way the information was collected, and selectively released,” the bank said in a statement at the time.

“We tell clients that their best practice, regardless of company size, is to treat each customer as if he or she is a potential undercover regulator,” Calkins told PowerSports Finance.


  • by BVG | 11/8/2016 2:16:37 PM

    I have yet to see, on any pricing engine, a box that asks for applicants race or ethnicity.

  • by MKR | 11/8/2016 2:31:04 PM

    Nor I.

  • by Anonymous | 11/8/2016 2:33:27 PM

    Exactly. If you don't have the credit or income to meet the requirements, you will be denied regardless of skin color. If you have a dozen family members all living with you but they only pay you cash, you can't claim the income for qualifying no matter what your skin color is. The rules are the rules, and they are color blind.


Should CFPB have more supervision over credit agencies?