Service members, veterans and their families who filed complaints about financial products or services have recovered more than $1 million, the Consumer Financial Protection Bureau announced.
The relief was reported in the CFPBs second snapshot of complaints from military consumers. The report covers more than 14,000 complaints from service members, veterans and their families received by the CFPB from July 21, 2011 through February 1, 2014.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established the Office of Servicemember Affairs to address specific consumer protection concerns for the nations military members and families. A priority of the office is to monitor the consumer complaints the CFPB receives from active-duty service members, veterans and their families.
The complaints submitted by the military mostly track with those of the population at large. In the last fiscal quarter, the CFPB handled on average more than 250 complaints per week from military families. Complaints have come from every state and every rank and branch of the Armed Services.
Service members, veterans and their families who complained to the CFPB have received more than $1 million in relief since July 2011. Not all service members, veterans and family members who submitted complaints received money. Many of them received non-monetary relief such as cleaning up their credit reports, stopping harassment from debt collectors and correcting account information and some had their complaints closed without relief. But the CFPB has seen monetary relief returned to military consumers across all products.
Among companies that reported monetary relief, this includes:
A median amount of $470 for mortgages;
A median amount of $143 for credit cards; and
A median amount of $125 for bank account or service.
According to the snapshot report, the top three complaints by service members, veterans and their families are mortgages, debt collection and credit cards.
While service members have all the protections that everyday consumers have, they also may have additional protections based on their military service. The CFPB is particularly concerned about when service members are not seeing the unique protections accorded to them by federal laws. Specifically, the CFPB is concerned with:
Debt collection: Since the CFPB began taking debt collection complaints in July 2013, it has quickly become the top complaint category for service members. Specifically, the CFPB is concerned about aggressive and deceptive tactics used by debt collectors against military members. These tactics often involve contacting a service members military chain of command, threatening punishment under the Uniform Code of Military Justice, threatening to have a service member reduced in rank or threatening to have a service members security clearance revoked.
Student loans: The Servicemembers Civil Relief Act provides financial protections so that members of the Armed Forces can undertake military duties without adverse financial consequences. But military consumers have reported problems obtaining correct and consistent information on available SCRA protections for their student loans. Some report being incorrectly told by their loan servicer that protections apply only when they are deployed or that the loan must be in deferment. Consumers also report they are repeatedly and incorrectly asked to submit additional documentation such as paperwork showing recertification of active duty status.
Payday loans: The Military Lending Act prohibits interest rates above 36 percent on some types of loans, including certain payday loans, auto title, and tax refund anticipation loans, to active-duty military, their spouses, and dependents. While the number of payday loan complaints received from servicemembers has been relatively small, the CFPB is concerned that lenders are skirting the MLA by lending just outside its narrow parameters.