On October 13, the FTC, as part of the International Consumer Protection and Enforcement Network (ICPEN), announced an updated version of ICPEN’s econsumer.gov, a website containing cross border consumer complaints and designed to assist law enforcement authorities investigate and take action against international scams. Originally launched in 2001, the website’s update includes (i) additional language availability; (ii) an improved complaint form, providing consumers with complaint trend data and guidance on how to resolve complaints; and (iii) an interface that is reader-friendly on tablets and smart phones. The FTC enters complaints received via the website into its complaint database, Consumer Sentinel, which is available to enforcers and regulators participating in ICPEN.
On October 27, the CFPB released its Monthly Complaint Report focusing on credit card complaints. The CFPB has received over 79,000 credit card-related complaints since it began receiving those complaints in July 2011. According to the report, consumer complaint issues specific to credit cards include: (i) confusion over how late fees are assessed; (ii) confusion about how to dispute inaccuracies in billing statements; (iii) accounts being closed without consent; and (iv) inability to allocate payments as consumers desire. The report also notes that, as of October 1, the CFPB has handled about 726,000 complaints across all product lines since it started receiving complaints.
BuckleySandler Webinar Recap: Strategies for Meeting the CFPB’s Expectations for Consumer Complaint Management
On September 29, BuckleySandler hosted a webinar, “Meeting the CFPB’s Expectations for Consumer Complaint Management,” presented by partner Jonice Gray Tucker, counsel Lori Sommerfield, and counsel Kari Hall. This recap covers highlights from their discussion, which included a discussion of the CFPB’s expectations and practical advice for managing consumer complaints in the evolving regulatory environment.
The webinar began with a brief background on the CFPB’s approach to consumer complaints. In particular, the presenters touched upon how the CFPB has used complaints as a driving force in determining priorities in guiding supervisory work, identifying leads for enforcement, and in informing rulemaking efforts. The presenters also discussed how the Bureau may deal with deficiencies in consumer complaint management in examinations and ways in which the outgrowth of such deficiencies may lead to enforcement actions. In addition, the presenters highlighted key elements of effective complaint management programs. Read more…
On September 22, the CFPB published the third volume of its monthly consumer complaints report, examining mortgage complaints received through its complaint database. In its latest snapshot report, the CFPB revealed that it has received more than 190,000 mortgage complaints as of September 1, 2015, making mortgage the most-complained-about financial product. Specifically, the report finds that ongoing questions persist with respect to (i) how consumers can prevent foreclosure; (ii) how and when to make payments when mortgage loans are transferred to a different servicer; and (iii) how to ensure accurate payment on mortgage loans. According to the CFPB, as of September 1, 2015, over 700,000 complaints have been handled since the consumer complaint database’s inception.
On August 25, the CFPB released the second of its monthly complaint reports, highlighting complaints received from consumers regarding the credit reporting industry. In its latest snapshot report, the CFPB revealed a 56 percent increase in the number of credit reporting complaints submitted by consumers between June 2015 and July 2015, and a 45 percent increase in credit reporting complaints from last year. The report also stated that 77 percent of credit reporting complaints involved inaccurate information on consumers’ credit reports. Despite the large volume of data used to prepare the report, the Bureau cautioned that the data is not normalized and that company-specific information should be considered in context of a company’s size.
On July 16, 2015, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) launched the first in a new series of monthly complaint reports highlighting key trends from consumer complaints submitted to the CFPB. Importantly, its monthly report provides significant detail on the complaints the CFPB has received, including the names of the companies that received the largest number of complaints.
Currently, the most-complained-about companies are also the largest bank and nonbank financial institutions in the country. Since these institutions have the highest numbers of customers, it is only natural that they have received the highest number of complaints. On the same day as the monthly report’s release, CFPB Director Richard Cordray provided remarks at an Americans for Financial Reform event in Washington, D.C. Director Cordray noted that in future monthly reports, the CFPB hopes to “normalize” its consumer complaint data by accounting for financial institutions’ respective size and volume. To that end, the CFPB issued a Request for Information seeking input on ways to enable the public to more easily understand company-level complaint information and make comparisons. The comment period closes August 31, 2015. Read more…
Today, the CFPB expanded its consumer complaint database, publishing for the first time over 7,700 consumer narratives which provide descriptive details of issues consumers face with respect to mortgages, bank accounts, credit cards, and debt collection, among other topics. As previously covered in InfoBytes, the Bureau finalized its Policy earlier this year requiring consumers who file complaints to “opt-in” to have the actual narrative of the complaint disclosed in the CFPB consumer complaint database. In addition, the Bureau issued a Request For Information seeking feedback on how complaint information contained within the database can be more easily identified and “normalized.” The Bureau also announced that it had received more than 627,000 complaints as of June 1, with mortgages and debt collection among the most frequent sources of complaints.
On April 27, the CFPB published a report regarding the trend of recent complaints submitted to the Bureau by Servicemembers entitled, A Snapshot of Complaints Received from Servicemembers, Veterans, and their Families. According to the report, between July 21, 2011 and December 31, 2014, the areas servicemembers reported to have the most problems with were debt collection, mortgage, and credit reporting. With debt collection making up 39% of the complaints, it is the most common type of complaint the Bureau receives from servicemembers: “[S]ervicemembers assert that the calculation of debt is inaccurate or unfair… [They] complain about telephone collections that are too frequent and that come at inconvenient times. They also complain about debt collectors calling their place of employment or third parties.” In addition to debt collection, mortgage, and credit reporting complaints, the report reveals the following products as problem areas for servicemembers: credit cards, bank accounts, consumer loans, and student loans. The Bureau’s report is an overview of the approximated 29,500 complaints the Bureau received from servicemembers since July 2011.
On March 19, the CFPB announced the publication of its Final Policy Statement on disclosure of complaint narratives. The Final Policy allows consumers who file complaints with the CFPB to “opt-in” to have the actual narrative of the complaint disclosed in the CFPB’s consumer complaint database, with private information scrubbed out of the narrative. Until now, the database contained only general information. The company identified in the complaint will have the option, for a 180 day period, to select from a pre-set list of structured responses to accompany the consumer complaint narrative. Further, the CFPB will disclose the consumer narrative when the company provides its public-facing response or after the company has been in receipt of the complaint for 60 calendar days, whichever occurs first. On the same day, the CFPB issued a Request For Information regarding the potential collection, identification, and sharing of consumer feedback specific to positive interactions with banks and non-banks in conjunction with the complaint handling process.
On February 9, the CFPB released a report detailing complaints associated with reverse mortgages. According to the report, a high volume of complaints concern requests for changes to loan terms, issues related to loan servicing, and foreclosure activities. The report covers approximately 1,200 complaints received from December 1, 2011 through December 31, 2014. The report also notes that “[s]ince the CFPB began accepting reverse mortgage complaints in December, 2011, HUD has issued more than 10 policy changes to the HECM [Home Equity Conversion Mortgage] program.” One of these policy changes, effective after March 2, 2015, will require lenders to conduct financial assessments of prospective borrowers prior to approving the loan. The change is expected to decrease defaults due to non-payment of real estate taxes and insurance for loans originated after March 2.
On November 5, the CFPB announced the release of a report highlighting debt collection issues among older Americans. The report analyzed nearly 8,700 complaints made by older consumers from July 2013 to September 2014. The most common debt collection complaints noted in the report relate to medical debt, debts of deceased family members, and threats to garnish older American’s federal benefits. Notably, of the complaints submitted, 17 percent were related to credit cards and 5 percent to payday loans.
On August 11, the Consumer Financial Protection Bureau (the CFPB or Bureau) issued a “consumer advisory” concerning virtual currency and also announced that it would begin accepting consumer complaints about virtual currency or virtual currency companies. These actions are the consumer agency’s first foray into virtual currencies, and they follow a recent GAO report that recommended the CFPB play a larger role in the development of federal virtual currency policy. Read more…
On July 29, the CFPB announced that it extended 30 days to September 22, 2014 the deadline for submitting comments on its proposal to publish consumer complaint narratives. In doing so, the CFPB again defended the proposal as consistent with practices at other government agencies and as an extension of its efforts to give voice to consumers’ concerns. The extension followed a request from a group of industry trade associations that noted the numerous legal and practical issues raised by the proposal.
On July 23, FINRA announced that the SEC approved a new rule prohibiting FINRA-supervised firms and registered representatives from conditioning settlement of a customer dispute on—or otherwise compensating a customer for—the customer’s agreement to consent to, or not to oppose, the firm’s or representative’s request to expunge such information from the Central Registration Depository (CRD) system. The CRD system is an online registration and licensing system for the securities industry, which contains information regarding members and registered representatives, such as personal information, registration, and employment history, as well as disclosure information including criminal matters, regulatory and disciplinary actions, civil judicial actions, and information relating to customer complaints and disputes. The information FINRA makes public through BrokerCheck is derived from CRD. Brokers who wish to have a customer dispute removed from the CRD system and, thereby, from BrokerCheck, must obtain a court order confirming an arbitration award recommending expungement relief. FINRA will announce the effective date of the new rule in a regulatory notice to be published shortly.
CFPB Expands Complaint Collection To Include Prepaid Cards, Additional Nonbank Products And Services
On July 21, the CFPB announced that it is now accepting consumer complaints regarding (i) prepaid products, including gift cards, benefit cards, and general purpose reloadable cards; (ii) credit repair services and debt settlement services; and (iii) pawn and title loans. The CFPB’s decision to field prepaid card complaints comes as the agency prepares a proposed rule related to those products. The press release states that the CFPB is planning to initiate the prepaid card rulemaking “in the coming months.” Director Cordray recently stated the rule would be proposed at the “end of the summer.”
The CFPB provides the following options for consumers to identify the nature of their complaints:
- Prepaid Cards – (i) managing, opening, or closing your account; (ii) fees; (iii) unauthorized transactions or other transaction issues; (iv) advertising, marketing or disclosures; (v) adding money; (vi) overdraft, savings or rewards features; or (vii) fraud or scam.
- Credit Repair and Debt Settlement – (i) advertising and marketing; (ii) customer service/customer relations; (iii) disclosures; (iv) excessive fees; (v) unexpected/other fees; (vi) incorrect exchange rate; (vii) lost or stolen money order; (viii) lost or stolen check; or (ix) fraud or scam.
- Pawn and Title Loans – (i) charged fees or interest I didn’t expect; (ii) can’t stop lender from charging my bank account; (iii) received a loan I didn’t apply for; (iv) applied for a loan, but didn’t receive money; (v) lender charged my bank account on wrong day or for wrong amount; (vi) lender didn’t credit payment to my account; (vii) can’t contact lender; (viii) lender sold the property / repossessed or sold the vehicle; or (ix) lender damaged or destroyed property / vehicle.
As with all of the CFPB’s complaint categories, consumers also have an opportunity to describe their complaints regarding these new products and services in narrative form. Last week, the CFPB proposed a policy change under which it would publish those consumer complaint narratives, a move it hopes will increase the number of complaints the CFPB fields. At the same time the CFPB released its latest “snapshot” of consumer complaints, which provides an overview of the complaint process and summary analyses of complaints handled by the CFPB since July 21, 2011.