CFPB Monthly Complaint Snapshot Spotlights Credit Reporting Complaints
Report Also Includes In-Depth Look at Consumer Complaints in Los Angeles, Calif.
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released its monthly consumer complaints snapshot. The report spotlights credit reporting complaints, which sharply increased compared to the prior month and the prior year. According to the report, the majority of the credit reporting complaints were about problems with incorrect information on the reports. This month’s snapshot also highlights trends seen in complaints coming from the Los Angeles, Calif. metro area. As of August 1, 2015 the Bureau has handled over 677,000 complaints across all products.
“Whether a consumer is trying to get a mortgage, apply for a student loan, or buy a car, credit reports are fundamentally important in allowing people to access their financial goals,” said CFPB Director Richard Cordray. “As we see a rise in the number of consumers complaining about this issue, the Bureau will continue to work to ensure that credit reports are fair, accurate, and readily available to all consumers.”
The Monthly Complaint Report can be found at: https://files.consumerfinance.gov/f/201508_cfpb_monthly-complaint-report-vol-2.pdf
Product Spotlight: Credit Reporting
Credit reporting affects the lives of most Americans. Consumer reporting companies collect information and provide reports on consumers that are used to decide whether consumers are eligible for credit. Credit reports and scores can determine everything from consumer eligibility for credit to the rates consumers pay for credit. Since 2012, the CFPB has supervised the nation’s largest credit reporting agencies which account for nearly 95 percent of the credit reporting market’s annual receipts and which maintain files on more than 200 million consumers. The Bureau has handled approximately 105,000 credit reporting complaints since it began accepting them in October 2012. Some of the findings in the snapshot include:
- Sharp increase in credit reporting complaints: The CFPB saw a 56 percent increase in the number of credit reporting complaints submitted by consumers between June 2015— 4,289 complaints—and July 2015 —6,969 complaints. In analyzing the period of May through July 2015, complaints increased by 45 percent compared to the prior year.
- Consumers complain about incorrect information on credit reports: The majority of credit reporting complaints—77 percent—submitted to the Bureau involve incorrect information on reports. Consumers frequently complain of debts already paid or debts not yet due showing up on their report, negatively affecting their credit scores.
- Consumers complain about trouble accessing reports: Consumers consistently report issues related to accessing their credit reports as a result of rigorous online identity authentication questions. If unable to access the reports over the Internet, consumers have to send copies of sensitive, identifying documents through the mail, which consumers feel is time-consuming and potentially unsecure.
- High-volume complaint companies: Out of all credit reporting complaints submitted to the Bureau between March and May 2015, 97 percent of them involved the three nationwide credit reporting agencies—Equifax, Experian, and Transunion.
Company-level complaint data in the report uses a three-month rolling average of complaints sent by the Bureau to companies for response. This data lags other complaint data in this report by two months to reflect the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer.
Because of the significance of credit reports, consumer reporting companies have been a major focus for the CFPB. The Bureau has published tips and guidance for how consumers can get and keep a good credit score, which can be found at: https://files.consumerfinance.gov/f/2011/07/CFPB_20110719_CreditScoresFlyer.pdf
National Complaint Overview
As of August 1, 2015 the CFPB has handled 677,200 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include:
- Complaint volume: For July 2015, the most-complained-about financial product or service was debt collection, representing about 31 percent of complaints submitted. Of the 26,704 complaints handled in July, approximately 8,224 of them were about debt collection. The second most-complained-about consumer product was credit reporting, accounting for approximately 6,696 complaints. The third most-complained-about financial product or service was mortgages, accounting for approximately 4,498 complaints.
- Product trends: In a year-to-year comparison, consumer loan complaints, which include pawn loans, title loans, and installment loans, showed the greatest percentage increase—61 percent—from the same time last year. They went from approximately 718 complaints to 1,154 complaints on average per month over a three-month time period. Bank account or services complaints showed the greatest percentage decrease over the same time period, going from a monthly average of 1,976 complaints in 2014 to 1,895 complaints in 2015, a 4 percent decrease.
- State information: Hawaii, Maine, Georgia, and North Carolina experienced the greatest complaint volume increases from the same time last year; with Hawaii up 37 percent, Maine up 36 percent, and both Georgia and North Carolina up by 33 percent. South Dakota, New Mexico, and Alaska experienced the greatest complaint volume decrease from the same time last year, with South Dakota down 31 percent, New Mexico down 16 percent, and Arkansas down 11 percent.
- Most-complained-about companies: The top three companies that received the most complaints from March through May 2015 were Equifax, Experian, and Bank of America. Of the five most-complained-about companies, three of them — Equifax, Experian, and Transunion— are credit reporting companies.
Geographic Spotlight: Los Angeles
This month, the CFPB highlighted the Los Angeles, Calif. metro area, the second largest metro area by population in the United States. As of August 1, 2015, consumers in California have submitted 94,000 – 14 percent—of the 677,200 complaints the CFPB has handled. Of those complaints, 33,700 of them have come from consumers in the Los Angeles metro area. Findings from the Los Angeles complaints include:
- Mortgages are the most-complained-about product: Mortgage-related complaints have been the most-complained-about product in Los Angeles metro area since the CFPB started taking complaints in July 2011. While the Bureau has received more mortgage complaints nationally than any other financial product, consumers in Los Angeles have submitted mortgage complaints at a higher rate—35 percent of total complaints—than the national average, which is 28 percent of total complaints.
- Fewer credit reporting and debt collection complaints than national numbers: For consumers in Los Angeles, credit reporting complaints—14 percent versus 16 percent of total complaints—and debt collection complaints—22 percent versus 25 percent of total complaints— make up a smaller percentage of the complaints they have submitted than consumers nationally.
- Companies that stand out: Without normalization, credit reporting companies Equifax and Experian were the two most-complained-about companies nationally over a twelve-month period. In the Los Angeles metro area, however, the most-complained-about companies were Bank of America and Wells Fargo. In the Los Angeles metro area Experian was the third most-complained about company, followed by Equifax (fifth) and TransUnion (sixth).
Company-level information should be considered in context of company size. The Bureau is seeking input on ways to enable the public to more easily understand company-level information and make comparisons through a Request for Information. The comment period closes August 31, 2015. https://federalregister.gov/a/2015-16096
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 four years ago in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans.
The Bureau expects companies to respond to complaints and to describe the steps they have taken or plan to take to resolve the complaint within 15 days of receipt. The CFPB expects companies to close all but the most complicated complaints within 60 days.
In June 2012, the CFPB launched its Consumer Complaint Database, which is the nation’s largest public collection of consumer financial complaints. When consumers submit a complaint they have the option to share publicly their explanation of what happened. For more individual-level complaint data and to read consumers’ experiences, go to the Consumer Complaint Database at: www.consumerfinance.gov/complaintdatabase/
To submit a complaint, consumers can:
- Go online at www.consumerfinance.gov/complaint/
- Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
- Fax the CFPB at 1-855-237-2392
- Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244
- Additionally, through “Ask CFPB,” consumers can get clear, unbiased answers to their questions at consumerfinance.gov/askcfpb or by calling 1-855-411-CFPB (2372).
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.