The Consumer Financial Protection Bureau (CFPB) helps Americans when they find themselves immersed in unexpected or unfair financial situations. Often, CFPB cases arise when lenders, banks, mortgagors and other financial product vendors ignore financial industry rules or act in a way that exploits the vulnerabilities of their customers. Since its inception in 2010, the CFPB has helped thousands of American consumers fend off onerous, unfair or even criminal financial entanglements.
Pressed for time? Check out our June 2017 CFPB Monthly Complaint Report Infographic for key points and milestones.
Monthly CFPB Compliance Report Reveals Successes for Veterans and Seniors
In the June 2017 Monthly Complaint Report, the CFPB outlined the many ways its efforts have helped consumers; it focused especially on complaints filed by some of the country’s most vulnerable populations: service members, veterans, and seniors.
The Report reveals that, since 2011, the CFPB has handled complaints from more than 74,000 service men and women and their families who found themselves in financial hot water due to unfair financial practices or out-and-out fraud.
America’s service people spoke out about their treatment in virtually every financial subcategory, with the most complaints (31,451) stemming from the activities of the debt collection industry. Mortgages (13,651) and erroneous credit reporting concerns (8,006) followed. Bank and credit card errors accounted for more than 10,000 complaints.
The Report also reveals that, in 2016, the number of complaints filed by service people rose by 8 percent over 2015. The increase indicates that more service people both need and access the services of the CFPB when faced with unfair or inappropriate financial challenges, such as repeated collections for debt not owed; harassment when there is no opportunity to make a payment, or finding incorrect information on their credit reports.
Consumers aged 50 years or older approached the CFPB more often than service members, with more than 103,000 people complaining about how financial institutions took advantage of them. Mortgages (26,452) and debt collections (25,561) caused the most grief for this group. Complaints about credit card issues, credit reporting practices, and banking services were also fairly equal in numbers (14,430, 13,798 and 12,380, respectively).
The General Population
Since 2011, the CFPB has handled more than 1.1 million complaints about financial industry practices, and the numbers keep rising. From 2015 to 2016, complaints to the CFPB rose across the board by 7 percent, and the data collected shows where the country still struggles to regain its financial footing.
Debt collection is one of the most significant issues, and more than one-quarter of all complaints (27 percent) involve improper or inappropriate debt collection activities. The debt collection industry first went under scrutiny in 1977 with the launch of the Fair Debt Collection Practices Act (FDCPA). At that time, Congress found “abundant evidence of abusive, unfair and deceptive debt collection activities” by many debt collectors.
The industry changed significantly in the intervening years, and today’s technologies often confound the debt collection processes even more. However, the CFPB notes that debt collection is an integral aspect of a functioning economy, and so it works to balance its oversight while also protecting consumers. The 2017 CFPB Debt Collections Report reveals that many debt collectors continue to operate outside of the rules and sometimes even outside of the law:
- Attempting to collect debts not owed was the biggest concern, accounting for 41 percent of all complaints.
- Disclosing confidential information to third parties during the debt collection process was also a fairly regular occurrence – one in every five complaints.
- Harassing or bullying communication practices, making false statement or assertions to coerce a payment, and threatening illegal actions also formed the basis of 39 percent of the complaints.
Student Loan Debt Failures Are Growing
The June Report also provides data about a relatively new development in financial services concerns: the rise in the number of defaulted student loans and the tactics debt collectors use to collect those debts. From Q4 2016 to Q1 2017, the number of complaints about student loan debt collection activities rose by 216 percent, from 3,121 complaints to 9,852. This number contrasts with the rise of consumer loan complaints that grew by only 6 percent from 2012 to 2017.
CFPB Responds to Consumer Concerns
The CFPB gathers millions of bits of data each year. For each complaint, the Agency connects with the offending company and tracks the resolution of the concern over time. The data is then used to inform federal lawmakers about the fair and unfair functioning of the country’s financial services sector. When unfair or illegal financial services activities are confirmed, the Agency will refer the case to the appropriate law enforcement agency.
The CFPB also publishes consumer data to ensure the Agency’s actions are transparent and to give consumers a glimpse of the work the CFPB does on their behalf. In more than half of complaints (52 percent), consumers consented to having their “narrative” included in the reports, so that lawmakers can see first-hand the impact that unfair financial activities have on citizens. In the 2017 report, the CFPB stated that the companies it contacted because of their alleged misbehavior generally provided a timely response to both the consumer and the CFPB (96 percent in the case of service members and 98 percent in the event of seniors).
According to narratives presented with the data, many consumers believed that the CFPB helped resolve their complaint promptly and in their favor.