On January 28, 2016, the Consumer Financial Protection Bureau (CFPB) released its latest Monthly Complaint Report for December 2015, which provides an overview of three-month trends in consumer complaints. This Monthly Report highlights consumer complaints related to “other financial service,” such as debt settlement, check cashing, money orders, and credit repair, as well as consumer complaints from the New York metro area.
Other Financial Service Spotlight
The CFPB tracks “other financial service” complaints, which are those complaints submitted by consumers that relate to financial services or products that fall outside of one of the CFPB’s major compliant categories. Examples of the complaints that fall into this category include debt settlement, check cashing, credit repair, and money orders. As of January 1, 2016, the CFPB has handled approximately 2,700 “other financial service” complaints. Among other things, the data concerning the “other financial service” category reveal the following:
- 60 percent of the complaints relate to debt settlement and credit repair companies, with many concerning companies charging up-front fees for those services; and
- complaints related to money orders frequently concern error resolution processes that consumers had to deal with, as well as issues of suspected fraud or scams involving the requirement of advance payment for promised goods that are ultimately never delivered.
National Complaint Overview
As of January 1, 2016, the CFPB has handled 790,000 complaints across all consumer financial products and services regulated by the CFPB. The Monthly Complaint Report includes the following statistics through December 2015:
- the three most complained about financial products were credit reporting, debt collection, and mortgages, which together represented slightly more than two-thirds—or 68%—of all complaints submitted;
- there was a 1% decrease in consumer complaints submitted between November and December 2015;
- complaints related to prepaid products rose 233 percent in a year-to-year comparison for the months October through December;
- of the five most populous states, Illinois displayed the sharpest rise—23%—in consumer complaints, in a year-to-year comparison between 2014 and 2015, for the time period of October through December; and
- the most complained about companies between August and October 2015 were Equifax, TransUnion, and Experian.
New York Complaints
In addition to providing national consumer financial complaint trends, the Monthly Complaint Report also highlights complaints originating from the New York metro area. Of the 790,000 complaints that have been submitted to the CFPB, 57,700 originated from the New York metro area (comprising parts of New York, New Jersey, Pennsylvania, and Connecticut). Consumer complaints submitted by New York metro area consumers revealed the following:
- mortgages are the most complained-about product, comprising 27 percent of all consumer complaints;
- New York metro area consumer complaints largely mirror national trends; and
- New York metro area consumers complained most about JPMorgan Chase, Experian, and Equifax.
CFPB’s Consumer Complaint Database
In June 2012, the CFPB launched its Consumer Complaint Database, which permits consumers to submit complaints about consumer financial products and services. Once the CFPB receives a complaint it forwards the complaint to the relevant company for a response. Companies generally have 15 days to respond to the complaint, unless an extension is secured in the meantime. The consumer complaint and company’s response, if one is provided, is published on the public facing Consumer Complaint Database, which can be accessed and viewed by the public. The information provided on the database can be valuable to not only consumers, but also to companies. For example, it provides a valuable tool for companies to understand how consumers view the quality of the company’s products and services. It also provides companies with an opportunity to evaluate whether complaint trends suggest that problems exist with certain products and services that need to be addressed to avoid or minimize regulatory action. As such, although the Consumer Complaint Database is not generally viewed favorably by financial industry companies, it can provide valuable information.
You can view the CFPB’s Monthly Complaint Report here: http://files.consumerfinance.gov/f/201601_cfpb_monthly-complaint-report-vol-7.pdf.
For more information on the CFPB’s consumer complaint process go here: https://www.stinson.com/Resources/PDF_Files/Navigating_CFPBs_Consumer_Complaint_Process.aspx.
You can view the CFPB’s Consumer Complaint Database here: http://www.consumerfinance.gov/complaintdatabase/.
ABOUT STINSON LEONARD STREET
Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.
Zane Gilmer is a member of the firm’s litigation practice group. His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce. Zane works out of the firm’s Denver office and he can be reached at email@example.com or 303.376.8416.
The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.