Consumer Financial Protection Bureau Monthly Complaint Snapshot Auto And Other Consumer Loan Complaints

Report Also Includes In-Depth Look at Consumer Complaints from Arkansas 

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a monthly complaint snapshot highlighting complaints about consumer loans including vehicle loans and leases, installment loans, title loans, and pawn loans. The report shows that consumers continue to complain about issues managing their loans and problems they encounter when they are unable to pay off the loans. This month’s report also highlights trends seen in complaints coming from Arkansas. As of June 1, 2016, the Bureau has handled approximately 906,400 complaints across all products. 

“Consumers deserve to be treated fairly in the financial marketplace,” said CFPB Director Richard Cordray. “It is important that financial institutions give consumers accurate information about the terms of their loan and provide proper guidance to help consumers manage the loan and ultimately pay it off.”

The Monthly Complaint Report can be found at: http://files.consumerfinance.gov/f/documents/Monthly_Complaint_Report_-_June_2016.pdf

Category Spotlight: Consumer Loans

The “consumer loan” category in the CFPB’s consumer complaint database includes complaints about vehicle loans and leases, installment loans, pawn loans, title loans, and personal lines of credit. Since the CFPB began accepting consumer complaints in July 2011, the Bureau has handled approximately 38,500 complaints in the consumer loan category. Some of the findings in the snapshot include: 

  • Majority of consumer loan complaints about vehicle loans: Of the 38,500 complaints in this category submitted to the Bureau, 52 percent were about vehicle loans. The second most common type of consumer loan complaints were about installment loans—31 percent.
  • Consumers complain about trouble managing their loan: Nearly half of complaints—43 percent—about consumer loans submitted to the Bureau have to do with consumers struggling to manage their loan, lease, or line of credit. Consumers complained about payment processing issues on their loan, such as not having payments applied to their accounts in a timely or proper manner. 
  • Unclear loan disclosures provided to consumers: Some consumers complained of not receiving clear explanations of how fees and high interest rates would affect the total cost of their loans. Additionally, consumers complained they did not understand why their account balances did not decrease after making a large number of monthly payments. 
  • Payment problems leading to repossessed vehicles: Consumers taking out loans sometimes complained of their vehicles being repossessed without any notification. In some of these cases, the repossession occurred while the consumer believed that a resolution agreement was in place. Other consumers complained of having to voluntarily give up their vehicle because they could no longer afford their payments. In many of these instances the consumer ended up owing more than the value of the vehicle. 

Recently, the CFPB released a new auto loan shopping sheet as part of the Know Before You Owe initiative. The shopping sheet offers a step-by-step guide to compare the costs of competing loan offers, and additional online resources aimed at helping consumers shop for an auto loan. The auto loan shopping resources can be found here:

http://www.consumerfinance.gov/consumer-tools/auto-loans/ 

National Complaint Overview

As of June 1, 2016, the CFPB has handled 906,400 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include: 

  • Complaint volume: For May 2016, the financial product or service most complained about was debt collection. Of the 23,800 complaints handled in May, approximately 6,911 were about debt collection. The second consumer product most complained about was credit reporting, which accounted for 4,931 complaints. The third financial product or service most complained about was mortgages, accounting for 4,317 complaints. 
  • Product trends: In a year-to-year comparison examining the three month time period from March to May, student loan complaints showed the greatest increase—61 percent—of any product or service. The Bureau received 683 student loan complaints between March and May 2015, while it received 1,098 complaints during the same time period in 2016. 
  • State information: New Mexico, Iowa, and Minnesota experienced the greatest year-to-year complaint volume increases from March to May 2016 compared to the same time period 12 months before; with New Mexico up 38 percent, Iowa up 33 percent, and Minnesota up 27 percent. 
  • Most complained about companies: The top three companies that received the most complaints from January through March 2016 were credit reporting companies Equifax, Experian, and TransUnion. 

Geographic Spotlight: Arkansas

This month, the CFPB highlighted complaints from Arkansas for the monthly complaint report. As of June 1, 2016, consumers in Arkansas have submitted 4,200 of the 906,400 complaints the CFPB has handled. Findings from the Arkansas complaints include: 

  • Debt collection is the most complained about product or service: Consumers in Arkansas submit more complaints about debt collection than any other financial product or service. Debt collection accounted for 29 percent of the complaints submitted to the Bureau by consumers from Arkansas, while nationally debt collection complaints account for 27 percent of complaints. 
  • Rate of mortgage complaints lower than national rate: While mortgage-related complaints make up about 26 percent of total complaint volume nationally, consumer complaints about mortgages made up only 19 percent of total complaints from Arkansas. 
  • Most complained about companies: In the April 2015 to March 2016 time period, the three most complained about companies by consumers from Arkansas were TransUnion, Equifax, and Bank of America. 

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 in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts and services, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans. 

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, visit the Consumer Complaint Database at: www.consumerfinance.gov/complaintdatabase/.

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 that companies are expected to close all but the most complicated complaints within 60 days. After the CFPB forwards a complaint to a company, the company also has 15 days to respond, confirming a commercial relationship with the consumer. Company-level information should be considered in the context of company size.

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).

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The Consumer Financial Protection Bureau 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