WASHINGTON—The Consumer Financial Protection Bureau has released its latest monthly consumer complaint snapshot, and data shows that complaints about debt settlement, check cashing, money orders, and credit repair often revolve around issues of fraud or problems with reliable customer service.
“Many of the financial services examined in today’s report are used by people struggling to make ends meet who can least afford to have issues with their financial products,” said CFPB Director Richard Cordray. “The Bureau will continue to use complaints submitted about these products to target bad actors in the financial marketplace.”
The CFPB explained that it offers “other financial service” as an category option for consumers submitting a complaint that falls outside of one of the Bureau’s other major complaint categories. Some of the complaints that fall into this category are debt settlement, check cashing, credit repair, and money orders. As of Jan. 1, the Bureau had handled approximately 2,700 other financial service complaints. Some of the findings in the snapshot include:
- Excessive fees for debt settlement and credit repair services: Of all complaints marked as other financial service, 60% were about problems consumers had when dealing with debt settlement and credit repair companies. These complaints often had to do with consumers being charged upfront fees when using these services. Charging upfront fees for these services is generally prohibited by existing law, the CFPB explained.
- Problems redeeming money orders: Consumers who submitted complaints about money order issues frequently complained about the error resolution process they had to deal with, and the length of time it took to resolve errors related to their money order with customer service representatives.
- Fraud when consumers use money orders and travelers checks: Consumers who submit complaints involving money orders and travelers checks often believe they have been the victims of fraud, the CFPB stated. “These complaints generally involve common scams involving advance payment when promised goods are not delivered and services not rendered.”
As of Jan. 1, the CFPB has handled 790,000 complaints nationally. Some of the highlights from the statistics in the latest snapshot report include:
- Complaint volume: For December 2015, the three most-complained-about financial products were credit reporting, debt collection, and mortgages, together representing slightly over two-thirds—68%—of complaints submitted. Overall, the CFPB said it saw a 1% decrease in complaint volume between November and December 2015.
- Product trends: In a year-to-year comparison examining the time periods of October to December, complaints about prepaid products rose 233%. Between Sept. 1 and Nov. 31, the CFPB received 459 complaints about prepaid products, mostly from one company.
- State information: Of the five most populous states, Illinois displayed the sharpest rise—23%—in complaint volume during the same three-month time period—October to December—between 2014 and 2015.
- Most-complained-about companies: The three companies the CFPB received the most complaints about between August and October of 2015 were Equifax, TransUnion, and Experian. Company-level information should be considered in the context of company size and activity in the relevant market, the CFPB explained.
The Monthly Complaint Report can be found here. http://files.consumerfinance.gov/f/201601_cfpb_monthly-complaint-report-vol-7.pdf