The role of the Consumer Financial Protection Bureau (CFPB) has come under scrutiny, but as of the time of this writing, it’s still a place for consumers to log complaints against financial institutions.
And during the coronavirus pandemic, the number of financial complaints filed in the CFPB’s database is surging according to a new analysis by LendEDU.
Key Findings Included:
- Between 3/13/20 and 7/17/20, 140,042 consumer complaints were filed with the CFPB, which is a 44% YOY increase from the 97,008 that were filed over the same time last year.
- The 140,042 complaints filed during this 127-day period is also a 38% increase compared to the previous 127-day period ending on 3/12/20.
- YOY, there was an 84% increase in the number of complaints related to “credit reporting, credit repair services, or other personal consumer reports,” a 77% increase in the number of complaints related to “money transfer, virtual currency, or money service,” a 29% increase in the number of complaints related to “credit card or prepaid card,” and a 41% decrease in the number of complaints related to “student loan.”
- More specifically, there was a 506% YOY increase in the number of complaints related to a “government benefit card.” Even more specific than that, there was a 1790% YOY increase in the number of complaints related to “problem getting a card or closing an account” when it came to those government benefit cards.
- There was a 109% YOY increase in credit reporting complaints related to “incorrect information on your report.”
The highest category complaint was in Credit reporting, credit repair services, or other personal consumer reports totaled 87,956 from March 13, 2020 to July 17, 2020.
As the coronavirus pandemic constricted budgets and depleted savings accounts, many consumers began finding it difficult to meet monthly payments. An earlier LendEDU survey found 54% of Americans were worried about making their credit card payments due to the pandemic, while 57% had the same concern over their mortgage payments.
Money Transfer Scams
There was also a 77% YOY increase in complaints categorized as “money transfer, virtual currency, or money service,” and Selita has had recent client experiences that could help explain this trend as well.
Student Loan Complaints Drop
Interestingly, there was a substantial 41% YOY decrease in the number of student loan complaints, which may be due to the Department of Education placing all federal student loans in pandemic forbearance until September 30, 2020.
Problems With Cares Act Debt Cards
It’s been widely reported that the distribution of these debit cards has been a mess as some consumers can’t use the cards because the wrong name is printed, while others are mistaking the inconspicuous packaging the card comes in as junk mail and tossing or shredding their one-time payment.
Further, the huge increase in credit reporting complaints can likely be traced back to financial institutions agreeing to reduced payments or deferment periods with consumers during the pandemic, yet not confirming these modified payment plans with the credit bureaus, while the big drop in student loan complaints is likely due to the pandemic forbearance that all federal borrowers were placed in until October 2020.
To read the full report visit https://lendedu.com/blog/consumer-finance-complaints-coronavirus/