CFPB March 2017 complaint report highlights credit card complaints, complaints from Massachusetts consumers; Ballard Spahr to hold April 13 webinar

By Barbara S. Mishkin on April 3, 2017

Posted in Credit Cards, Regulatory and Enforcement

The CFPB has issued its March 2017 complaint report that highlights credit card complaints. The report also highlights complaints from consumers in Massachusetts and the Boston metro area. On April 13, 2017, from 12:00 p.m. to 1:00 p.m.ET, Ballard Spahr will hold a webinar, “The CFPB’s Consumer Credit Card Market RFI and Other Important Recent Credit Card Developments.” Click here for more information and a link to register.

General findings include the following:

As of March 1, 2017, the CFPB handled approximately 1,136,000 complaints nationally, including approximately 26,300 complaints in February 2017.
Debt collection continued to be the most-complained-about financial product or service in February 2017, representing about 30 percent of complaints submitted.
Debt collection complaints, together with complaints about credit reporting and student loans, collectively represented about 62 percent of the complaints submitted in February 2017.
Complaints about student loans showed the greatest month-over-month decrease, decreasing 51 percent from January 2017. According to the CFPB, there was a spike in student loan complaints in January 2017 “around the time the CFPB took a major enforcement action against a loan servicer.” At the same time, student loans had the greatest percentage increase based on a three-month average, increasing about 429 percent from the same time last year (December 2015 to February 2016 compared with December 2016 to February 2017). In February 2016, the CFPB began accepting complaints about federal student loans. Previously, such complaints were directed to the Department of Education. As we have noted in blog posts about prior CFPB monthly complaint reports issued beginning in April 2016, rather than reflecting an increase in the number of borrowers making student loan complaints, the increasing percentages represented by student loan complaints received by the CFPB most likely reflects the change in where such complaints are sent.
Payday loans showed the greatest percentage decrease based on a three-month average, decreasing about 286 percent from the same time last year (December 2015 to February 2016 compared with December 2016 to February 2017). Complaints during those periods decreased from 399 complaints in 2015/2016 to 286 complaints in 2016/2017. In the February 2017 complaint report, payday loans also showed the greatest percentage decrease based on a three-month average.
Montana, Georgia, Missouri, and South Carolina experienced the greatest complaint volume increases from the same time last year (December 2015 to February 2016 compared with December 2016 to February 2017) with increases of, respectively, 53, 53, 39, and 39 percent.
West Virginia, Kansas, and New Hampshire experienced the greatest complaint volume decreases from the same time last year (December 2015 to February 2016 compared with December 2016 to February 2017) with decreases of, respectively, 6, 3, and 3 percent.

Findings regarding credit card complaints include the following:

The CFPB has handled approximately 116,200 credit card complaints since July 21, 2011, making credit cards the fourth-most-complained-about product, representing 10 percent of all complaints.
The most common issues identified in complaints involved billing disputes, particularly disputes involving fraudulent charges. Consumers complained about the receipt of confusing guidance when notifying their credit card company of such charges and difficulty in having the charges removed even after receiving notice from the credit card company that the dispute was resolved favorably.
Consumers complained about problems with rewards programs, such as being unable to take advantage of benefits after meeting program requirements for such benefits and online information that contradicted information received from customer representatives.
Consumers complained about the terms of deferred-interest programs, including confusion as to how payments were applied to multiple balances. Deferred-interest and rewards programs are among the topics on which the CFPB is seeking information in the RFI about the credit card market that it issued last month.
Consumers reported issues related to card issuance, such as unsolicited credit cards and problems arising in portfolio conversions from one lender to another.

Findings regarding complaints from Massachusetts consumers include the following:

As of March 1, 2017, approximately 20,600 complaints were submitted by Massachusetts consumers of which approximately 15,400 were from Boston consumers.
Mortgages was the most-complained-about product, representing 26 percent of all complaints submitted by Massachusetts consumers, which was higher than the national average rate of 24 percent of all complaints submitted by consumers.
Average monthly complaints received from Massachusetts consumers increased 19 percent from the same time last year (December 2015 to February 2016 compared with December 2016 to February 2017), lower than the increase of 22 percent nationally.