By Katalina M. Bianco, J.D.
The latest Consumer Financial Protection Bureau monthly complaint snapshot indicates that consumers continue to experience issues when attempting to solve problems with disputed money transfer transactions. This month, the CFPB’s snapshot also highlights trends in complaints from Pennsylvania.
"Since opening our doors in 2011, we have handled over one million complaints from consumers about their problems with financial products and services," said CFPB Director Richard Cordray. "Not only have we achieved substantial relief for consumers, but hearing directly from consumers is fundamental to our mission. We can better protect all consumers because of what we learn from those who have submitted complaints and shared their experiences with us."
Money transfer complaints. As of Sept. 1, 2016, the CFPB has handled approximately 6,900 money transfer complaints. In the current snapshot, the bureau reports that consumers complained about:
- trouble accessing funds: consumers complained of holds being placed on their accounts by money transfer service providers without an explanation;
- problems resolving errors: sellers describe several scenarios where they do not receive payments after sending the item to the buyer; and
- fraud: complaints about fraud comprised 41 percent of the overall complaints. A common complaint submitted by consumers is that they send money to a seller but do not receive the items they purchased in return.
National complaint overview. For August 2016, debt collection was the most-complained-about financial product or service. Of the 28,651 complaints handled by the CFPB in July, there were 9,746 complaints about debt collection. The second most-complained-about consumer product was credit reporting, which accounted for 5,123 complaints. The third most-complained-about financial product or service was mortgages, accounting for 4,310 complaints.
In a month-to-month comparison, complaints about debt collection submitted to the CFPB rose 50 percent between July and August 2016. While there were 6,488 debt collection complaints submitted to the bureau in July, the CFPB received 9,746 debt collection complaints in the month of August.
Maine, Nebraska, and Idaho experienced the greatest year-to-year complaint volume decreases from the June to August 2016 period versus the same time period 12 months before; with Maine down 36 percent, Nebraska down 19 percent, and Idaho down 15 percent.
Finally, the top three companies that received the most complaints from April through June 2016 were credit reporting companies Equifax, Experian, and TransUnion.
Pennsylvania focus. This month’s report provides an overview of complaints from Pennsylvania and the Philadelphia metro area. As of Sept. 1, 2016, consumers in Pennsylvania have submitted 34,700 complaints, with 24,100 of them coming from the Philadelphia metro area. The CFPB found that:
- debt collection is the most complained-about product or service;
- the rate of mortgage complaints in Philadelphia is slightly higher than the national rate, accounting for 26 percent of complaints as opposed to the national rate of 25 percent; and
- the three most complained-about companies by consumers from Pennsylvania were Equifax, TransUnion, and Wells Fargo.
Blog post. The bureau added a related post to its blog advising consumers of the importance of speaking up when they have complaints. The post stresses the importance of consumer complaints to the bureau's supervision.
"Complaints play a central role in everything we do," the CFPB blogged. "They help us identify and prioritize problems for potential action. We turn your complaints into action to improve the marketplace."
For more information about the CFPB's monthly complaint snapshot, subscribe to the Banking and Finance Law Daily.