The Consumer Financial Protection Bureau has released its latest monthly consumer complaint snapshot, highlighting consumer complaints in December about financial services such as collections, debt settlement, credit repair, check cashing and money orders.
The report shows that consumer complaints about these types of financial services generally revolve around issues of fraud or problems with reliable customer service. The report also highlights trends seen in complaints coming from New York State and the New York metro area.
As of Jan. 1, the CFPB has handled more than 790,000 complaints across all products. Some of the highlights from the report include:
Complaint volume: The three most-complained-about financial products were credit reporting, debt collection and mortgages, together representing slightly over two-thirds - 68% - of complaints submitted. Overall, the CFPB saw a 1% decrease in complaint volume between November and December.
Most-complained-about companies: The three companies the CFPB received the most complaints about between August and October last year were Equifax, TransUnion and Experian, which isn’t surprising given their size and activity in the market.
Product trends: In a year-to-year comparison examining the time periods of October to December, complaints about prepaid products rose 233%. Between Sept. 1 and Nov. 30, the CFPB received 459 complaints about prepaid products, mostly from one company.
- State information: Of the five most populous states, Illinois displayed the sharpest rise - 23% - in complaint volume during the same three month time period -October to December - between 2014 and 2015.
The CFPB offers "other financial service" as an option for consumers submitting a complaint that falls outside of the CFPB's other major complaint categories. Some of the complaints that fall into the category are debt settlement, credit repair, check cashing and money orders. The CFPB handled approximately 2,700 "other financial service complaints” in December.
Some of the findings include:
Excessive fees for debt settlement and credit repair services: Of all complaints marked as other financial service, 60% of them were about problems consumers had when dealing with debt settlement and credit repair companies. These complaints often had to do with consumers being charged upfront fees when using these services. Charging upfront fees for these services is generally prohibited by existing law.
Problems redeeming money orders: Consumers who submitted complaints about money order issues frequently complained about the error resolution process they had to deal with, and the length of time it took to resolve errors related to their money order with customer service representatives.
- Fraud when consumers use money orders and travelers checks: Consumers who submit complaints involving money orders and travelers checks often believe they have been the victims of fraud. These complaints generally involve common scams involving advance payment when promised goods are not delivered and services not rendered.
"Many of the financial services examined in today’s report are used by people struggling to make ends meet who can least afford to have issues with their financial products," said CFPB Director Richard Cordray. "The Bureau will continue to use complaints submitted about these products to target bad actors in the financial marketplace."
The CFPB highlighted New York State and the New York metro area for the report’s geographic spotlight. In December, consumers in the New York metro area, which comprises parts of New Jersey, Pennsylvania and Connecticut as well as New York City - have submitted 57,700 of the 790,000 complaints the CFPB has handled.
Consumers from New York State as a whole have submitted 50,400 complaints. Findings from the New York complaints include:
Mortgages are the most-complained-about product: Mortgages have been the most-complained-about product in New York State and the New York metro area. Of the 57,700 complaints submitted by consumers in the New York metro area, 27% have been related to mortgages. For New York State as a whole, 25% of the 50,400 complaints were mortgage related.
- New York complaint volume mostly mirrors national trends: Although consumers in New York State (21%)and the New York metro area complain about debt collection at a lower rate than consumers nationally (26%), complaint volume about other financial products is similar to that on the national level.
- Most-complained-about companies: JPMorgan Chase, Experian and Equifax were the three most-complained-about companies from consumers in the New York metro area.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established consumer complaint handling as an integral part of the CFPB’s work. The CFPB began accepting complaints as soon as it opened its doors in July 2011.