Say cheese… Last week, the CFPB released its second monthly consumer complaint snapshot.
The CFPB is squarely focused on consumer complaints because complaints are generally the first indicator of a compliance problem—especially in the area of UDAAP. The CFPB explains, “The Consumer Financial Protection Bureau (CFPB) is the first federal agency solely focused on consumer financial protection and consumer complaints are an integral part of that work.”
As we discussed here and here, beginning in July, the CFPB began publishing a monthly snapshot analyzing consumer complaints. Each monthly report will focus on trends in consumer complaints and highlight an industry area and geographic region. This month’s snapshot looks at credit reporting and complaints coming from the Los Angeles metro area.
To share a few highlights from the August 2015 report:
- In July, the CFPB received 26,704 complaints—significantly more than it has received in any other month. Compared to June, complaints increased by 15 percent, making the June-to-July increase one of the largest in the past 18 months.
- Debt collection, credit reporting and mortgages, in that order, had the highest number of complaints in July—together representing about 73 percent of all complaints. Debt collection has topped that list for 23 consecutive months.
- Looking at complaint volume for May through July, complaints about consumer loans (which include pawn loans, title loans and installment loans) once again showed the highest percentage increase over the same period last year—61 percent. In terms of pure volume of complaints, consumer loans are still in the middle-of-the-pack.
- Last month's report demonstrated a 15 percent increase in consumer complaints coming from Alabama for the three-month trailing period compared to the same time last year. This month's report shows a similar increase of 16 percent from May through July of this year compared to the same period in 2014.
- Once again, the report identifies the 10 most-complained-about companies. Equifax, Experian and Bank of America (again) top the list this month. The remainder of the list is the same as last month, and all companies on the list are either credit bureaus, banks or mortgage companies.
- This month's report highlights credit reporting complaints and notes a sharp increase in the number of complaints over last month. By a wide margin, most credit reporting complaints deal with allegedly incorrect information.
The surprise in this month’s snapshot is the significant increase in the number of complaints over last month, mainly due to the increase in credit reporting complaints.
Does this mean consumers are increasingly dissatisfied with financial products and services? Or, does it mean that consumers (and their lawyers and credit repair companies) are becoming increasingly aware of the CFPB complaint database? Either way, to reiterate a previous post, all companies need to have a good system for addressing consumer complaints.
Otherwise, smile… You might end up in the CFPB’s snapshot.