The Consumer Financial Protection Bureau (CFPB) has launched the first in a new series of monthly reports to highlight key trends from consumer complaints submitted to the Bureau. The monthly report includes complaint data on company performance, complaint volume, state and local information, and product trends. Each month, the report will spotlight a particular product and geographic location—this inaugural report provides a closer look at debt collection complaints and complaints from consumers in Milwaukee, Wis. The reports will provide insight for the public into the hundreds of thousands of consumer complaints on financial products and services handled by the CFPB.
“Consumer complaints are the CFPB’s compass and play a central role in everything we do. They help us identify and prioritize problems for potential action,” said CFPB Director Richard Cordray. “These monthly reports will enable us to share that data with the public more regularly, so that everyone can benefit from the information.”
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established consumer complaint handling as an integral part of the CFPB’s work. The CFPB began accepting complaints as soon as it opened its doors four years ago in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans. As of July 1, 2015, the Bureau has handled 650,700 complaints.
The Bureau has published annual reports since it first started taking complaints and the new monthly reports will include similar information. They provide a high-level snapshot of trends and analyses found in consumer complaints and can be used to inform the public and the marketplace. Today’s report provides complaint highlights as of July 1, 2015. Information includes:
►Complaint volume: For June 2015, the most-complained-about financial product or service was debt collection, representing about 32 percent of complaints submitted. Of the 23,400 complaints handled, over 7,400 of them were about debt collection. The second most-complained-about consumer product was mortgages, accounting for over 4,700 complaints. The third most-complained-about financial product or service was credit reporting, accounting for over 4,300 complaints.
►Product trends: Consumer loan complaints showed the greatest percentage increase from the same time last year, nearly doubling from approximately 660 complaints to 1,020 complaints on average per month.
►State information: Hawaii, West Virginia, and Maine experienced the greatest complaint volume increases from the same time last year; with Hawaii up 41 percent, West Virginia up 38 percent, and Maine up 38 percent. South Dakota, Iowa, and Rhode Island experienced the greatest complaint volume decrease from the same time last year, with South Dakota down 40 percent, Iowa down 14 percent, and Rhode Island down 12 percent.
►Most-complained-about companies: While company-level information should be considered in the context of company size, the top three companies that received the most complaints from CFPB for February through April 2015 were Equifax, Experian, and Bank of America. Equifax experienced the greatest jump in complaints over the same period last year, up 8 percent. Mortgage servicer Ocwen experienced the greatest decrease in average monthly complaint volume, down 29 percent from the same period last year.
Company-level complaint data in the report uses a three-month rolling average of complaints sent to companies for response. This data lags other complaint data in this report by two months to reflect the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer. Regarding normalizing the data, the CFPB is seeking input on ways to enable the public to more easily understand company-level information and make comparisons through a Request for Information. The comment period closes Aug. 31, 2015.
This month’s report spotlights debt collection. By examining issues, companies, and geographic trends on a particular product, consumers and industry will have greater insight to take corrective actions. The CFPB has handled more than 163,000 debt collection complaints. Concerns that the CFPB continues to see:
►Consumers complain about collections of debts not owed: The most common issue identified by consumers is continued attempts by debt collectors to collect debts the consumer contends are not owed.
►Consumers complain about communication tactics: The second most common complaint has to do with communication tactics. Consumers complain that they are contacted too frequently or at inconvenient times of the day.
►High-volume complaint companies: The top three most-complained-about companies – without normalization – were Enhanced Recovery Company, Encore Capital Group, and Portfolio Recovery Associates. Enhanced Recovery Company saw the greatest percentage increase, going from 55 complaints to 193 complaints on average per month – up 252 percent when compared with the same time period last year.
Geographic Spotlight: Milwaukee
Each month, the CFPB will spotlight the complaints from one part of the country. This month the CFPB is spotlighting Milwaukee, Wis., where the Bureau held a field hearing on May 14, 2015. Highlighting one particular region or location can spur people into creating their own localized reports and seeing what consumers in their own areas are saying about the financial marketplace. As of July 1, 2015, about 7,700 complaints—one percent—of the 650,700 complaints the CFPB has handled have been from consumers in Wisconsin. Of complaints from consumers in Wisconsin, 2,700—34 percent—are from consumers in the Milwaukee metro area. Milwaukee findings include:
►Higher number of debt collection complaints from Milwaukee: Debt collection has been the most complained about product month-over-month since the CFPB started taking debt collection complaints in July 2013. But, in total, the CFPB has handled more mortgage complaints compared to debt collection. This is not the case, though, for Milwaukee. Cumulatively speaking, debt collection is the most complained about consumer financial product or service for consumers in Milwaukee overall.
►Lower mortgage and credit reporting complaints than national numbers: Consumers in Milwaukee submit fewer mortgage complaints (26 percent versus 28 percent) and fewer credit reporting complaints (12 percent versus 15 percent) than consumers nationally.
►Companies that stand out: Without normalization, in the May 2014 to April 2015 period, Equifax, Experian, and TransUnion—the three largest national credit reporting companies—were among the most-complained-about companies along with JPMorgan Chase, Bank of America, Wells Fargo, Citibank, Ocwen, and Capital One.
The Bureau expects companies to respond to complaints within 15 days and to describe the steps they have taken or plan to take to resolve the complaint. The CFPB expects companies to close all but the most complicated complaints within 60 days. Complaints inform the Bureau’s work and help to identify issues in the market, which feed into the Bureau’s supervision and enforcement prioritization process. The Bureau will continue to work toward expanding its complaint handling capabilities to include other products and services under its authority.
In June 2012, the CFPB launched its Consumer Complaint Database, which is the nation’s largest public collection of consumer financial complaints. It includes basic, anonymous, individual-level information about the complaints received, including the date of submission, the consumer’s zip code, the relevant company, the product type, the issue the consumer is complaining about, and how the company handled the complaint. Now, when consumers submit a complaint they have the option to share their explanation of what happened.