In issuing its Consumer Response Annual Report analyzing complaints handled in 2013, the CFPB’s headline was that volume nearly doubled from 91,000 complaints received in 2012 to 163,700 complaints received in 2013.
The report provides data on the most common types of complaints for each product, the handling of complaints and median monetary relief. Of the 163,700 complaints received in 2013, approximately 54% were received through the CFPB’s website, 11% via telephone calls, 24% via referrals from other agencies and regulators and the balance via mail, e-mail and fax. Based on the CFPB’s breakdown of the number of complaints received in each category, mortgages (59,900), debt collection (31,100), and credit reporting (24,200) accounted for 71% of all 2013 complaints.
59% of the mortgage complaints involved problems when a consumer is unable to pay (loan modification, collection, or foreclosure) and 26% involved making payments (servicing, payments, or escrow). 33% of the debt collection complaints involved continued attempts to collect debts not owed, 22% involved communication tactics, and 14% involved taking or threatening illegal action. For credit reporting complaints, 73% involved incorrect information on credit reports.
The report indicates that about 7% of the complaints received in 2013 resulted in monetary relief for consumers. This includes median relief of $460 for 1,225 mortgage complaints, $126 for 3,090 credit card complaints, $111 for 3,210 complaints involving bank accounts or services, $187 for 240 student loan complaints, and $185 for 100 money transfer complaints. Of the 31,100 debt collection complaints received in 2013, 250 complaints resulted in monetary relief with $348 the median relief. Of the 1,000 payday loan complaints received in 2013, 20 complaints resulted in monetary relief with $585 the median relief.
In his remarks yesterday at CBA Live 2014, Steven Antonakes, CFPB Deputy Director, indicated that the CFPB is now receiving more complaints about debt collection than about mortgages. According to Mr. Antonakes, debt collection complaints are averaging 5,000 per month.
The CFPB continues to stress the significant role that complaints play in setting its agenda. In Director Cordray’s introductory message to the report, complaints are described as “our compass” which “make a difference by informing our work and helping us identify and prioritize problems for potential supervisory, enforcement, and regulatory action.” Because they often are not valid, complaints have the propensity to be unreliable evidence that the complained about conduct occurred. Indeed, as we observed, the CFPB relied on complaints to draw unwarranted conclusions in its annual debt collection report issued last month. We hope the CFPB will be mindful of the shortcomings of complaints as it continues to use them in its decision-making process.