Increasingly, digital comparison-shopping tools are using algorithms that order recommendations or ranking lists based on multiple variables, such as consumer characteristics, product features, consumer ratings, the likelihood a consumer would be approved, various click-through and application completion or approval rates, and provider compensation or bids. In other cases, operators just present an ordered list of recommended providers. Also, some operators collect information from consumers and then purport to provide a list of options tailored to the consumers’ particular circumstances or preferences. In the latter case, some operators allow people who use the tool to sort options based on different criteria or to otherwise customize the presentation of information and options (sometimes after a default presentation). In addition to presenting options offered by third-party providers of financial products and services, some operators of digital comparison-shopping tools offer their own financial products and services and include their own options in the comparison-shopping tool.Ĭomparison-shopping information can be presented in a static or interactive format. 1 These tools facilitate comparison shopping by presenting information about the costs, features, or other terms for a set of comparable financial products or services, such as credit cards, student loans, and savings accounts, offered by different providers. Digital comparison-shopping toolsĬonsumers are increasingly using digital comparison-shopping tools to find consumer financial products or services that fit their interests. Digital intermediaries commonly receive remuneration or other benefits, sometimes referred to as “bounties” by market participants. However, consumers often interact with them in similar ways and many digital intermediaries operate as both, presenting themselves as consumer-serving comparison-shopping tools while simultaneously increasing profits by directing leads based on financial benefit. Offering a comparison-shopping tool for consumers and generating leads for financial companies can and sometimes do operate as distinct business models, and for the purposes of this circular, comparison-shopping tools and lead generators are discussed separately. These intermediaries include websites, applications, or chatbots that operate as comparison-shopping tools, which consumers turn to for help with researching, comparing, and selecting consumer financial products or services. Backgroundįor many households, the process of shopping for a financial product or service now includes interactions with digital intermediaries. Where consumers reasonably rely on an operator of a digital comparison-shopping tool or a lead generator to act in their interests, the operator or lead generator can take unreasonable advantage of that reliance by giving preferential treatment to their own or other products or services through steering or enhanced product placement, for financial or other benefits. Similarly, lead generators can violate the prohibition on abusive practices if they steer consumers to one participating financial services provider instead of another based on compensation received. Operators of digital comparison-shopping tools can violate the prohibition on abusive acts or practices if they distort the shopping experience by steering consumers to certain products or services based on remuneration to the operator. Can operators of digital comparison-shopping tools or lead generators violate the Consumer Financial Protection Act (CFPA) by preferencing products or services based on financial or other benefits to the operator? Response
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