On March 1, 2016, the Consumer Financial Protection Bureau (CFPB) released its latest Monthly Complaint Report for February 2016, which provides an overview of three-month trends in consumer complaints. This Monthly Report also highlights consumer complaints related to prepaid products and complaints from the Houston, Texas metro area.
Prepaid Product Complaint Spotlight
Prepaid products are one of the fastest growing financial products, which permit consumers or third-parties to load funds, allow people to make payments, store funds, withdraw cash, receive direct deposits, and send funds to other consumers. As of February 1, 2016, the CFPB has handled approximately 4,300 prepaid product complaints. The prepaid product complaints show the following:
- a large number of complaints related to Empowerment Ventures, LLC, the parent company of RushCard;
- consumers could not access funds on cards;
- companies refused to reissue expired cards with the remaining balance from the expired card; and
- consumers incurred charges including, monthly, inactivity, transaction, balance inquiry, PIN change, and overdraft fees.
National Complaint Overview
As of February 1, 2016, the CFPB handled 811,700 complaints across all consumer financial products and services regulated by the CFPB. The Monthly Complaint Report includes the following statistics about those complaints through February 1, 2016:
- debt collection, mortgages, and credit reporting were the most complained about products, representing two-thirds of all complaints;
- there was an 8 percent increase in complaint submissions between December 2015 and January 2016;
- in a comparison of November 2015 through January 2016 versus the same time period 12 months before, complaints about debt settlement, check cashing, and money orders rose 77 percent;
- complaints related to payday lending showed the greatest decrease;
- complaints coming from Arizona showed the greatest increase in volume; and
- the most complained about companies between September 2015 and November 2015 were Equifax, TransUnion, and Experian.
Houston Area Complaints
In addition to providing national consumer financial complaint trends, the Monthly Complaint Report also highlights complaints originating from the Houston, Texas metro area. Of the 8111,700 complaints that have been submitted to the CFPB, 63,200 have originated from Texas and 15,700 from the Houston metro area. Consumer complaints submitted by Texas consumers revealed the following:
- Texas consumers complained the most about debt collection services;
- Texas mortgage-related complaints are lower than the national average; and
- Texas consumers complained the most about Equifax, Experian, and TransUnion.
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.
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 Monthly Complaint Report here: http://www.consumerfinance.gov/newsroom/cfpb-monthly-complaint-snapshot-examines-prepaid-complaints/.
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.