Would it surprise you to learn that complaints about credit cards and mortgages are already piling up faster than any other financial product? Not only that, but the complaints are ones you might not think – misunderstandings of how revolving credit works and how dispute charges run high. According to the new database unveiled by the Consumer Financial Protection Bureau, those two are easily reining supreme.
But don’t take its word for it, the database is public information (complaints are listed in the database only after the company responds to the complaint or after it has had the complaint for 15 days) and already, there have been more than 130,000 individual complaints collected over the past year and half. While credit cards and mortgages are leading, bank accounts and other financial products are coming in fast, too.
These complaints, say many consumers we spoke to, have been handled both efficiently and professionally and most say they were willing to settle with what the outcome ultimately was. But we wanted to know the breakdown – who’s complaining about what and more importantly, is CFPB getting cooperation from banks, credit card companies and other lenders?
CFPB is quick to remind consumers reading the database that the allegations aren’t verified, but “a commercial relationship between the consumer and the company is substantiated before the complaint is added to the database.” The database was created as part of a compliance issue set up when Dodd Frank reform kicked in a few years ago. Since July of 2011, the Consumer Financial Protection Bureau has been gathering those complaints. In total, there have been 131,000 complaints and they’re broken down this way:
- Mortgages – 63,700 complaints
- Credit Cards – 30,600 complaints
- Bank Accounts and Bank Services – 19,800 complaints
- Consumer Loan Products – 4,100 complaints
- Private Student Loans – 4,600 complaints
- Credit Reporting – 6,700 complaints
CFPB Director Richard Cordray said at the release,
We have helped consumers secure millions of dollars in monetary relief and further satisfaction in the form of non-monetary relief, such as cleaning up their credit reports, which helps them put problems behind them that have been affecting them for months or even years.
He explained that his response team is better able to make significant changes not only in consumers’ lives, but in the entire financial marketplace. He went on to explain that around half of all of the complaints received were through the website. Nine percent came from phone calls and referrals from regulators and other consumer agencies accounted for 32 percent. Those include complaints submitted via email, mail and fax.
More Complaint Breakdown
Further, 83 percent of the complaints that have been received were forwarded to the appropriate bank, credit card company or other service provider so that they could review and respond. Meanwhile, the other complaints were forwarded to regulatory agencies, were deemed incomplete or are currently pending action. Of those submitted to the banks, card companies and other financial entities, 95% of them have been responded to. It’s at that time the bureau contacts the consumer again to provide the response and then to determine what, if any action, is then warranted.
Those actions might include options offered to the consumers such as further disputing the response, agreeing with the response or notifying the consumer that the complaint has been closed, either with or without relief. The consumers are also encouraged to contact the bureau again within thirty days if they wish to further pursue their complaint. Of those, twenty one percent or 19,600 sought further actions and filed the appropriate response within the thirty day window.
But how do those complaints break down? And what are the most common complaints?
For mortgages, CFPB says the most common complaint is that consumers run into problems when they’re behind and are unable to work out something with the lender in order to prevent foreclosure. Whether it’s loan modifications or other programs, they say lenders are unwilling to work with them. Those consumers are generally looking not for any other assistance except information on how to remain in their homes. Often, they are confused when it comes the process for any of the available programs and the subsequent requirements. CFPB points out it’s usually document submission timeframes, trial periods for payments, how the payments are allocated and the treatment of how income is factored into those calculations. Other complaints include confusion over trial period payments and whether it’s a guarantee for placement into a more permanent modification solution.
Other common mortgage complaints include issues surrounding payments and escrow accounts. There is a small percentage of consumers whose complaints were about the appraisers, loan officers, closing officers or attorneys or others associated with the closing process.
Meanwhile, the CFPB says billing disputes are the most common type of credit card complaint. Fifteen percent of credit card complaints are due to billing disputes. Again, consumers are confused about the process surrounding billing cycles and they say they’re not given an opportunity to challenge what they believe are inaccuracies on their monthly credit card statements. Some say they were unaware of a sixty day window in which to dispute billing errors. Some consumers also say they don’t understand how interest rates are calculated and the differences with how revolving credit works. Other complaints include identity theft, fraud, embezzlement and other similar crimes. They also say they didn’t know how to file an override on their accounts for merchandise or service that wasn’t up to par.
About 27,700, or 84 percent of credit card complaints have been sent to banks and credit card companies for review and response. The other credit card complaints, says CFPB, have been referred to other regulatory agencies, were found to be incomplete or are still in a pending state with the consumer or the CFPB. Credit card companies have responded to 96 percent of those complaints that were forwarded to them.
Have you ever filed a complaint with CFPB? Was it resolved in a timely manner? Share your story with us and let us know what the outcome ultimately meant for you and your family.