Editor’s Note: This article contains updated information on the credit reporting agencies’ response to consumer complaints, highlighted in bold below.
The Consumer Financial Protection Bureau has released its Annual consumer response report for 2020, which shows that the CFPB handled around 542,300 complaints last year, an increase of almost 54% from the roughly 352,400 complaints handled in 2019, according to a Press release.
The impact of the COVID-19 pandemic on the consumer financial market is reflected in the increase in complaints submitted to the CFPB, he reports.
Complaints about credit and consumer reports made up over 58% of complaints received by the CFPB, followed by debt collection (15%), credit cards (7%), checks or savings (6 %) and mortgage complaints (5%). according to the report.
“The pandemic has been one of the most disruptive long-term events we will see in our lifetimes,” CFPB Acting Director Dave Uejio said. press release on the report. “Unsurprisingly, the shockwaves he sent across the globe were deeply felt in the consumer financial market. Consumer complaints provide the CFPB with an important real-time window into the problems consumers face in the market. The CFPB expects businesses to respond to these concerns and that consumers receive responses from businesses that respond to the issues consumers raise in their complaints.
Debt collection complaints had a response rate of 97% of businesses and businesses closed 85% of complaints with an explanation, 9% with non-cash relief and 0.6% with cash relief.
The CFPB has received the most complaints about other debts, such as telephone bills, utilities, and credit card debt.
Consumers have also reported identity theft as a cause of having debt in collection. These complaints have been on the rise for several years, according to the report.
Consumers said they discovered the debt was due to identity theft when looking at their credit reports. In response, they said third-party collectors would provide copies of the validation notices and detailed information on the origin of the debt. Some debt collectors have completely halted their collection efforts.
Additional results include:
- As of April 2020, consumers started submitting more than 3,000 complaints with keywords for coronavirus almost every month. Consumers submitted approximately 32,100 complaints mentioning the coronavirus or related keywords in 2020. The absence of coronavirus as a keyword in a complaint does not necessarily mean that the complaint was unrelated to the financial impact of the pandemic.
- Florida consumers filed more complaints per capita than consumers in any other state (309 complaints per 100,000 population).
- The CFPB received 40,800 complaints from servicemen, veterans and families of self-identified servicemen.
- The CFPB received more complaints from consumers about inaccurate information on their credit and consumer reports in 2020 than in 2019.
- Consumers primarily submitted these complaints about the three largest nationwide credit reporting agencies: Equifax, Experian, and TransUnion.
- While National Credit Reporting Agencies (NCRAs) have generally provided substantial and relatively detailed responses to the majority of complaints from previous years, including providing details of dispute investigations and describing actions taken to address them. Consumers trying to tackle identity theft, this year the CFPB observed that the NCRAs have stopped providing complete and accurate answers in many of these complaints. The NCRA provided closing responses indicating that a dispute would be filed on behalf of the consumer, but otherwise did not respond to issues raised by consumers in their complaints. The NCRA mentioned alleged third-party activity in their responses to consumers, but did not detail the steps taken to authenticate consumers or to address issues raised in their complaints.
The CFPB will issue a separate report later this year regarding complaints submitted about credit reporting agencies that are related to incomplete or inaccurate information on consumer credit reports in accordance with its reporting requirements under the Fair. Credit Reporting Act.
Debt collectors continue to help consumers manage their payments, provide resources on hardship programs and offer solutions tailored to their financial situation. Many members of ACA International report that consumer calls to agencies have been on the rise in recent months. Consumers have asked for help managing their finances and exploring options for hardship due to the ongoing COVID-19 pandemic.
The ACA also continues to advocate with the CFPB to ensure that accurate industry data is documented in the database by providing context to complaints and robust audit processes.