U.S. consumers filed a record number of complaints in 2020 – this was their # 1 grievance

The Consumer Financial Protection Bureau received a record number of consumer complaints in 2020, with credit complaints making up the majority of grievances, according to a study released on Monday by the United States PIRG Education Fund.

The number of complaints about consumer financial products and services increased by more than 50% between 2019 and 2020, according to analysis by the CFPB watchdog group. consumer complaints database – rising to 444,551 from their previous record of 277,366 a year earlier.

“In 2020, each month set a record volume of complaints for that month, and complaint volumes have increased dramatically during the coronavirus pandemic,” the report’s authors wrote.

Experts say President Biden’s CFPB will likely be be more aggressive in the fight against predatory behavior and the imposition of penalties, as well as to strengthen consumer protection in areas such as payday loans, overdraft fees, consumer data and credit reports. The Biden-era CFPB is also expected to undertake a more in-depth review of the student loan industry, experts and former staff say.

Incorrect credit report information

But there was one problem that beat everyone else for complaints.

Credit report complaints more than doubled from 136,000 in 2019 to 282,000 in 2020, and accounted for about 63% of all complaints in 2020, PIRG found. Almost nine in 10 credit reporting complaints involved the big three credit reporting agencies Experian EXPN,
+ 0.08%
(86,600 complaints), TransUnion TRU,
(83,300 complaints) and Equifax EFX,
(76,300 complaints).

Francis Creighton, president and CEO of the Consumer Data Industry Association, a trade group that represents the three agencies, said internal industry data showed no evidence that complaint activity reflected a reporting problem. credit.

“However, there is real evidence that there are organizations, like credit repair companies, that attempt to take advantage of consumers by promising them that they can remove negative but accurate information from credit reports for a fee,” he said. Creighton told MarketWatch in a statement. declaration. “In addition, these same companies abuse the CFPB complaints portal with numerous repeated frivolous disputes. “

He also noted that Equifax, Experian and TransUnion announced last April at the start of the pandemic that they would provide Americans with free weekly credit reports for the next year. “While disputes must be resolved within 30 days, the majority are resolved within two weeks,” he said. “If the dispute extends beyond this period, the law requires that the disputed information be removed from the credit report. “

The majority of credit report complaints were related to “incorrect information on your report”, with most of these incorrect information complaints being classified as “the information belongs to someone else”. About one in five consumer complaint stories about someone else’s information mentioned identity theft, according to the report.

Credit repair companies promise to remove negative information, if it is correct, from credit reports for a fee.

The Big Three credit bureaus also topped the “10 Most Criticized Companies” list by a large margin. This list also included a number of banks.

“Analysis of the volumes of complaints and the types of complaints received shows that as consumers faced the economic fallout from the pandemic, they increasingly faced problems with financial companies,” the report said. “The CFPB, the Biden administration, and congressional policymakers should take immediate and longer-term action to protect consumers and curb unfair practices in the financial market.”

President Biden has appointed Federal Trade Commissioner Rohit Chopra, an ally of Senator Elizabeth Warren (D., Massachusetts) who served as CFPB’s first Student Loans Ombudsman, to head the office. Biden chose Dave Uejio to serve as the Bureau’s interim director after taking office in January.

A CFPB spokesperson declined to comment on the PIRG report, but acknowledged in a statement to MarketWatch that consumers had submitted “many more complaints during the pandemic.”

“Complaints are the lifeblood of CFPB and they guide the agency’s strategic thinking. ”

– CFPB spokesperson

“Complaints are the cornerstone of the CFPB and they guide the agency’s strategic thinking. The high volume of complaints during COVID-19 is one of the reasons Acting Director Uejio announced that responding to the economic hardships associated with COVID-19 is one of the agency’s two priorities, with the promotion racial equity, ”the spokesperson said.

“The CFPB takes the responsiveness of businesses to these complaints very seriously, and we examine how businesses respond to complaints and what those complaints say to determine whether to prioritize reviews or enforcement actions. “, they added.

CFPB financial companies penalized less during the Trump administration. Black Americans were hardest hit under Trump-era CFPB. After Trump took office, consumers in majority black or low-income zip codes who filed complaints were less likely to get financial compensation than those in majority white zip codes, according to a recently published working paper researchers from Boston College.

(The CFPB said at the time that it did not have an opportunity to review the results of the study and therefore was not in a position to comment.)

The US PIRG report made several recommendations, including early Senate confirmation of Chopra and “comprehensive and permanent credit assessment reforms,” ​​such as access to free credit scores and a better process for challenging credit report errors.

“We urge the Office of Consumer Affairs to start setting the rules, relaunching investigations and making the consumer complaints database easy to find and use again,” the authors added. “In other words, consumers need a government on their side, especially during this time. Consumers deserve no less.

Read also : Consumer complaints to CFPB skyrocket as coronavirus outbreak continues

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