Consumer Financial Protection Bureau: Common Customer Complaints

The Consumer Financial Protection Bureau (CFPB) recently published its Consumer Response Annual Report, which discusses consumer complaints received in 2014. Trends revealed in the report provide banks and other financial institutions with valuable insights into where their potential compliance risks lie.

About the process

The CFPB began accepting consumer complaints in mid-2011 and, as of the end of February 2015, had handled more than 550,000 complaints. The Bureau accepts complaints about a wide range of products and services — including mortgages, bank accounts, student loans, auto loans, credit cards, debt collection and credit reporting. 

The CFPB’s Consumer Response team screens complaints based on several criteria, including whether they’re complete, duplicative of previous submissions, or more suitable for another regulator. Once screened, complaints are sent via secure Web portal to the subject bank or other company for review and, if appropriate, communication with the customer.

After determining the action it will take in response to the complaint, the bank or other company reports back to the customer and the CFPB via the portal. Consumer Response considers the timeliness and content of the response, together with feedback from the customer, in prioritizing complaints for investigation.

Highlights of the report

The CFPB handled more than 250,000 consumer complaints in calendar year 2014. The most common complaints involved debt collection (35%), mortgages (20%), credit reporting (18%), bank accounts (8%) and credit cards (7%). Mortgage-related complaints fell into several categories:

• Problems involving inability to pay (loan modification, collection, foreclosure) — 49%,
• Making payments (loan servicing, payments, escrow accounts) — 35%,
• Applying for the loan (application, originator, mortgage broker) — 8%,
• Signing the agreement (settlement process and costs) — 4%,
• Receiving a credit offer (credit decision/underwriting) — 2%, and
• Other — 1%.

The most common complaints involved problems customers face when unable to make payments, particularly delays and ambiguity in the review of their loan modification applications. Some customers, for example, felt that they weren’t provided a reasonable time to comply with documentation requests. Others complained that they weren’t considered for all available loss mitigation options or that the terms were unfavorable. Some customers who were successful in obtaining loan modifications complained that derogatory credit reporting wasn’t amended as promised. Other complaints involved issues related to short sales or foreclosure proceedings. 

The most common complaints about bank accounts involved account opening, closing or management (47%) and deposits and withdrawals (24%). Account-related issues included complaints about account maintenance fees, legal processing fees for judgments and levies, changes in account terms, confusing marketing, early withdrawal penalties for certificates of deposit, and involuntary account closures.

Issues related to deposits and withdrawals included complaints about transaction holds, the financial institution’s right to offset deposit accounts, and unauthorized debit card charges. Also, consumers were frustrated by the handling of error disputes and requests to stop payment of preauthorized electronic debits. 

Know your risks

Reviewing the report can help you evaluate your risks related to CFPB examination and enforcement efforts. View the full report, dated March 30, 2015, here.

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