Agency reports success in resolving credit card problems
December 02, 2011
Three months after it first started collecting credit card complaints, the Consumer Financial Protection Bureau has announced it's resolved about three-quarters of the complaints it has received. The government agency's initial report also noted that three factors, including consumer confusion, were largely responsible for many of the disputes.
The government steps in for credit card customers
The CFPB was formed by the Dodd-Frank Act of 2010. The bureau's Consumer Response office began accepting credit card complaints in July 2011. Consumer complaints and inquiries could be submitted via mail, phone, the Internet or by referral from another agency.
"When consumers contact us, we get a snapshot of how the consumer finance markets are working," said Raj Date, Special Advisor to the Secretary of the Treasury on the CFPB, in the statement. "We will continue to work with consumers, credit card companies, government agencies, and others to improve consumer education and ensure CFPB's regulation, supervision, and enforcement efforts are effective."
Since July, the Consumer Response office has collected more than 5,000 complaints regarding credit cards, and of those, 3,100 were reportedly resolved. In 400 cases, consumers disputed the findings of the resolution. However, not everyone contacting the CFPB was calling in a complaint. More than half of the contacts received by the office were general questions or to provide feedback on credit card issues.
Consumer confusion partly to blame
In addition to reporting the results of complaints received, the initial report from the CFPB also contained observations regarding the reasons for the complaints. According to the office, three factors seemed to contribute to credit card disputes:
- Consumer confusion
- Third-party fraud
- Factual disputes
In cases of factual disputes, the bureau found most credit card issuers were willing to resolve complaints. When fraud occurred, the CFPB obtained redress for the consumers involved and consulted with law enforcement when appropriate.
However, in many complaint cases, consumers failed to understand the terms of a credit card or related product, such as a debt protection plan. According to the CFPB, these complaints represent discord between how credit card products function and how consumers expect them to work. The bureau plans to use the information gathered in these complaints to formulate a plan to address customer confusion. The CFPB says this plan may include consumer education as well as new regulatory policies.
While the Consumer Response office originally only took complaints for credit cards, it recently expanded its services to include mortgage complaints as well. By the end of 2012, the office hopes to be able to take complaints regarding all financial products and services offered in the United States.
