The CFPB has issued its October 2016 complaint report which highlights complaints about prepaid cards and complaints from consumers in North Carolina and the Charlotte metro area. The CFPB began taking prepaid card complaints in July 2014.
Earlier this month, the CFPB issued its long-anticipated final rule for general purpose prepaid accounts. On November 17, 2016, from 12 p.m. to 1 p.m. ET, Ballard Spahr attorneys will hold a webinar, “The CFPB’s Final Prepaid Cards Rule.” A link to register is available here.
General findings include the following:
- As of October 1, 2016, the CFPB handled approximately 1,008,500 complaints nationally, including approximately 26,400 complaints in September 2016.
- Although debt collection continued to be the most-complained-about financial product or service in September 2016, representing about 28 percent of complaints submitted, the number of debt collection complaints received by the CFPB in September 2016 was 24% less than the number of complaints received in August 2016. Debt collection complaints, together with complaints about credit reporting and mortgages, collectively represented about 63 percent of the complaints submitted in September 2016.
- Complaints about student loans showed the greatest percentage increase based on a three-month average, increasing about 96 percent from the same time last year (July to September 2015 compared with July to September 2016). 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 complaint reports issued beginning in April 2016, rather than reflecting an increase in the number of borrowers making student loan complaints, the increase most likely reflects the change in where such complaints are sent.
- Payday loan complaints showed the greatest percentage decrease based on a three-month average, decreasing about 21 percent from the same time last year (July to September 2015 compared with July to September 2016). Complaints during those periods decreased from 458 complaints in 2015 to 363 complaints in 2016. In the complaint reports for March through September 2016, payday loan complaints also showed the greatest percentage decrease based on a three-month average.
- New Mexico, Colorado, and Wyoming experienced the greatest complaint volume increases from the same time last year (July to September 2015 compared with July to September 2016) with increases of, respectively, 28, 24, and 24 percent.
- Maine, Idaho, and Rhode Island experienced the greatest complaint volume decreases from the same time last year (July to September 2015 compared with July to September 2016) with decreases of, respectively, 34, 25, and 21 percent.
Findings regarding prepaid card complaints include the following:
- The CFPB has handled approximately 6,000 prepaid card complaints, representing about 0.6 percent of total complaints.
- Consumers frequently complained about the posting of questionable transactions and the cancellation of cards without notice after submitting a dispute. Consumers complained about requests for submission of validating documents when purchases were declined, claiming such documents were frequently not in the consumer’s possession and difficult to obtain.
- Consumers complained about being unable to activate or access funds on cards received as a refund.
- Consumers reported that companies sometimes issued cards without proper verification resulting in the theft of their funds and complained of delayed credits after notifying the company of fraudulent or unauthorized charge or after the return or cancellation of a purchase.
- Consumers complained of balance discrepancies, particularly when they were unable to check balance and transaction histories online or when not provided with statements.
Findings regarding complaints from North Carolina consumers include the following:
- As of October 1, 2016, approximately 27,600 complaints were submitted by North Carolina consumers of which approximately 29 percent (about 8,000) were from Charlotte consumers.
- Mortgages were the most-complained-about product, representing 27 percent of all complaints submitted by North Carolina consumers and, on a national basis, 25 percent of all complaints submitted by consumers.
- Average monthly complaints received from North Carolina consumers increased 13 percent from 2014 to 2015, higher than the increase of 8 percent nationally.