The CFPB’s Consumer Response Annual Report analyzing complaints handled in 2014 indicates that volume rose 53% from 163,700 complaints in 2013 to 250,200 in 2014.
The report provides data on the most common types of complaints for each product, the handling of complaints, and median monetary relief. Of the 250,200 complaints received in 2014, approximately 67% were received through the CFPB’s website, 9% via telephone calls, 15% 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, debt collection (88,300), mortgages (51,200), and credit reporting (44,800) accounted for 73% of all 2014 complaints. Debt collection and credit reporting complaints had the largest increases from 2013 (when the number of complaints received was, respectively, 31,100 and 24,200). Also, while in 2013 the CFPB received the most complaints about mortgages, it received substantially more complaints in 2014 about debt collection than mortgages.
37% of the debt collection complaints involved continued attempts to collect debts not owed (with many asserting that the amount sought was inaccurate or unfair), 20% involved communication tactics, 13% involved debt validation (such as not receiving enough information to verify the debt), and 12% involved taking or threatening illegal action. For credit reporting complaints, 77% involved incorrect information on credit reports.
The CFPB provides monetary relief information for companies that reported such relief. This includes median relief of $363 for 670 debt collection complaints, $475 for 1,000 mortgage complaints, $24 for 200 credit reporting complaints, $105 for 3,060 bank account and service complaints, $121 for 3,140 credit card complaints, $200 for 270 private student loan complaints, and $319 for 70 payday loan complaints.
The 2014 report includes a section entitled “Credit Reporting Case Study” in which the CFPB provides further analysis about the credit reporting complaints it received. According to the CFPB, the factors that may have contributed to the 85% increase in credit reporting complaints from 2013 to 2014 include “increased consumer access and awareness about credit reporting issues.” The portion of that section entitled “Investigator Observations” appears intended to highlight issues on which CFPB examiners are likely to focus. These issues include:
- Credit report accuracy. The CFPB indicates that a large number of complaints concern the accuracy of public records, such as bankruptcies, judgments, and tax liens. (The CFPB notes that a large portion of judgments involve debt collection lawsuits.) According to the CFPB, consumers frequently complain that public records contained on their credit reports are not updated in a timely manner and consumers also emphasize the difficulties that they experience when attempting to remedy errors.
- Student loan issues. The CFPB observes that it receives a significant number of complaints about the inaccurate reporting of student loans, with consumers often reporting that the original loans were still reported as open after their loans were transferred from one servicer to the other, conveying the impression that consumers have more student loans than they actually did. Other issues noted by the CFPB include: forgiven loans not being reported as closed, incorrect loan balances or terms, and incorrect reporting of consolidated loans as multiple individual loans. The CFPB also highlights complaints by consumers about significant drops in their credit scores when one missed payment resulted in several delinquencies being reported, incorrect disbursement of payments by loan servicers, and
co-signers not receiving notice that negative information would be reported on their account as a result of the primary borrower’s failure to make payments.
As he did in last year’s report, Director Cordray describes complaints as a “compass to direct our work and help us identify and prioritize problems for potential supervisory, enforcement, and regulatory action.” Because they are often invalid, complaints do not serve as reliable evidence that the complained about conduct occurred. The CFPB’s recent decision to publicly disclose consumer narratives only increases the potential for reputational damage from the publication of unverified complaints. We continue to hope the CFPB will be mindful of the shortcomings of complaints when using them as a “compass” in its decision-making process.