WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a monthly complaint snapshot highlighting consumer complaints about credit cards. The report shows that consumers continue to complain about trouble receiving clear information from their credit card issuers regarding creditworthiness, and the assessment of payments and fees. This month’s report also highlights trends seen in complaints coming from Washington. As of July 1, 2016, the Bureau has handled approximately 930,700 total complaints across all products.
“Credit cards are an important tool in the day-to-day financial lives of a large number of consumers,” said CFPB Director Richard Cordray. “It is important that credit card companies are being straightforward and clear about the costs and fees associated with their products so consumers have the information they need to make informed financial decisions.”
The Monthly Complaint Report can be found at: https://www.consumerfinance.gov/data-research/research-reports/monthly-complaint-report-vol-13/
Category Spotlight: Credit Cards
Credit cards are currently used by more than half of adult consumers in the United States. These consumers collectively carry over $700 billion in credit card debt as of January 2015. As of July 1, 2016, the Bureau has handled approximately 97,100 credit card-related complaints. Some of the findings in the snapshot include:
- Consumers perceive unfairness in credit decisions: Consumers frequently complained about trouble understanding the decisions made by credit card companies regarding the consumer’s initial application for a card, as well as changes made to the interest rate charged. Many consumers believed these decisions were being made in relation to existing items on their credit report that they feel do not reflect their creditworthiness.
- Consumers confused over how payments are applied to accounts with multiple balances: Consumers also complained about how payments are applied to accounts that have more than one balance. These consumers complained that they were not clearly informed how the payments they made were applied and were upset when their payments did not first go to pay off the most time-sensitive balances.
- Credit card fees not adequately disclosed to consumers: Consumers complained about various fees and additional costs on their credit cards. Consumers believed that they were unfairly charged when an automatic payment failed or when a billing statement was not delivered to them by the credit card company in a timely manner.
- Consumers misled about offers for reward programs: Consumers complained about difficulty receiving benefits promised to them through special rewards programs. These consumers said that the terms and conditions of how these rewards programs worked were not adequately explained to them when they initially signed up for their credit card. Some of the types of programs that people complained about included bonus points or miles programs, cash back programs, and travel benefits programs.
National Complaint Overview
As of July 1, 2016, the CFPB has handled approximately 930,700 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include:
- Complaint volume: For June 2016, the financial product or service most complained about was debt collection. Of the 24,500 complaints handled in June, 7,032 were about debt collection. The second most-complained-about consumer product was credit reporting, which accounted for 5,001 complaints. The third most-complained-about financial product or service was mortgages, accounting for 4,323 complaints.
- Product trends: In a year-to-year comparison examining the three month time period of April to June, student loan complaints showed the greatest increase—62 percent—of any product or service. The Bureau received 652 student loan complaints between April and June 2015, while it received 1,057 complaints during the same time period in 2016.
- State information: North Dakota, Alaska, and Wyoming experienced the greatest year-to-year complaint volume increases from the April 2016 to June 2016 period versus the same time period 12 months before; with North Dakota up 40 percent, Alaska up 31 percent, and Wyoming up 30 percent.
- Most-complained-about companies: The top three companies that received the most complaints from February through April 2016 were credit reporting companies Equifax, Experian, and TransUnion.
Geographic Spotlight: Washington
This month, the CFPB highlighted complaints from Washington and the Seattle metro area for the monthly complaint report. As of July 1, 2016, consumers in Washington have submitted 18,900 of the 930,700 complaints the CFPB has handled, with 11,000 of them coming from the Seattle metro area. Findings from the Washington complaints include:
- Mortgages are the most-complained-about product or service: Consumers in Washington submit more complaints about mortgages than any other financial product or service. Mortgage complaints accounted for 29 percent of the complaints submitted to the Bureau by consumers from Washington, while nationally mortgage complaints account for 25 percent of complaints.
- Rate of debt collection complaints nearly equal to national rate: Complaints related to debt collection accounted for 28 percent of all complaints submitted by consumers from Washington. This closely mirrors the rate at which consumers nationally submit debt collection complaints to the CFPB—27 percent.
- Most complained about companies: In the May 2015 to April 2016 time period, the three most complained about companies by consumers from Washington were Equifax, TransUnion and Experian.
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).
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.