We revise the conditions for the physical viability of a cosmological model in which dark matter has bulk viscosity and also interacts with dark energy. We have also included radiation and baryonic matter components; all matter components are represented by perfect fluids, except the dark matter, that is treated as an imperfect fluid. We impose upon the model the condition of a complete cosmological dynamics that results in an either null or negative bulk viscosity, but the latter also

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... with the Local Second Law of Thermodynamics. The model is also compared with cosmological observations at different redshifts: type Ia supernova, the shift parameter of CMB, the acoustic peak of BAO, and the Hubble parameter H(z). In general, observations consistently point out to a negative value of the bulk viscous coefficient, and in overall the fitting procedure shows no preference for the model over the standard LCDM model.