The Consumer Financial Protection Bureau (CFPB) released its latest monthly consumer complaint report on consumer complaints in December about financial services. The report highlights that complaints on debt collection were still the largest volume of complaints in December, 6410 of the 20,300 or (31%) of the total complaints.
Debt collection, mortgage, and credit reporting complaints continue to be the top three most-complained-about consumer financial products and services, collectively representing about 68 percent of complaints submitted in December 2015.
The most common types of other financial service products consumers complain about are debt settlement (47 percent) and check cashing (14 percent). The most common issues identified by consumers are problems with fraud or scams (46 percent) and customer service or customer relations (21 percent).
Many other financial service complaints relate to credit repair or debt settlement. In particular consumers reported a large number of instances of upfront fees for both debt settlement and credit repair services. The report references that in some cases, existing law prohibits these upfront fees and that consumers should be aware of the potential for scams in both of these areas.
More than 26 percent of debt settlement and credit repair complaints mention student loans. In more than 70 percent of these complaints the consumer selected “Fraud or Scam” as their primary issue. This suggests that student loan borrowers may be at particular risk for debt settlement and credit repair scams.
The complete report can be found here.
The monthly report rarely provides much new information. The number of complaints on debt collection remains relatively constant. Though that could be considered a positive for the industry in light of the increased awareness of the CFPB complaint portal and the ease of the process for filing complaints.
It was interesting to see the discussion on Debt Settlement and Credit Repair organizations. Most companies in the ARM industry report a significant increase in the number of form letters from these companies.