CFPB's Monthly Report Focuses on Credit Card Products

The CFPB issued its monthly report on consumer complaints this week. The report is a high level snapshot of trends in consumer complaints. The Report provides a summary of the volume of complaints by product category, by company and by state. Additionally, it highlights a product type. The product “spotlight” rotates monthly. This month’s report highlights credit card account complaints.

 

Complaint Volume by Product

• After a one month respite, mortgage is back among the three products yielding the highest volume of complaints on a three month average rejoining debt collection and credit reporting;
• A trend worth noting is that the number of debt collection complaints remains almost flat; 
• Student loans continue to reflect the highest increase in change from last year– a 62% increase when compared to 2015. The CFPB attributes this increase to the updating of its student loan intake form to include complaints after Federal student loan servicing in late February 2016; 
• Student loan complaints showed the greatest month to month decrease after spiking in January 2017. The Report suggests the January spike in complaints concerning student loans appears to be in response to the Bureau’s enforcement action against Navient.

Highlighted Product: Credit Card Accounts

Credit card providers and servicers may want to pay close attention to their policies and procedures concerning billing disputes based upon this month’s report.  Specifically, the Report notes that:

·        Billing disputes continue to be the most complained about aspect of credit card products, making up 17% of all credit card complaints. The report indicates that billing disputes include those involving fraudulent charges and the resolution of those disputes.  Correspondingly, identity theft/fraud/embezzlement comprised 10% of all credit card complaints. Specifically, consumers complained that:

o   They were billed for charges that were not initiated by them or authorized users;

o   Credit card companies provided confusing guidance concerning billing disputes;

o   Credit card companies were slow to respond to billing disputes; and

o   Their credit reports reflected negative activity based upon account activity that was not initiated or authorized by them.

·        Reward programs were also highlighted in the Report as a source of complaints.  Consumers complained that they were unable to take advantage of reward benefits after meeting the requirements for the rewards and that customer service representatives provided information that was contradictory of the online account information. 

·        Late fees and other account servicing charges remain a concern for consumers.  The Report indicates complaints regarding improperly assessed late fees and payments not being timely credited.

So what might the credit card industry expect to see from regulators? Based upon the current complaint trends, the credit card industry is likely to continue to see a continued focus on to their application of credit card payments, as well as scrutiny as to their billing dispute policies and procedures.