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Gov’t shines light on consumer complaints

June 22, 2012

| Money Rates Columnist

The government agency responsible for investigating consumer finance complaints made some of its data available to the public this week. The Consumer Financial Protection Bureau published Tuesday a report of complaint activity it received between July 21, 2011 and June 1, 2012.

In addition, the bureau unveiled a website that allows consumers to track credit card complaints by type of dispute, region and issuer.

Mortgages top consumer complaints

While the CFPB has been taking consumer complaints since July of last year, it initially only accepted complaints regarding credit card companies. Then, on December 1, 2011, it also began to receive mortgage complaints. Finally, on March 1, 2012, the bureau opened its complaint process to private student loans, consumer loans and other bank products and services.

Despite receiving mortgage complaints for only half of the year, the CFPB reports the largest percentage of consumer contacts they have received have been mortgage-related. Between July 2011 and June 2012, the bureau received 19,250 mortgage complaints compared to 16,840 credit card complaints. Another 6,490 complaints were made about bank services and products while 1,270 came in regarding private student loans.

Mortgage complaints often surrounded issues relating to loan modifications, collections and foreclosures. Other common complaints involved payment issues, loan servicing and escrow accounts.

To address the complaints, the CFPB sent most of the inquiries to the company in question for their review and response. In cases in which the company agreed to provide some monetary relief for the consumer, the median amount of relief reported was $410.

Credit card complaints made public

According to the CFPB report, the most common credit card complaints were billing disputes. Other complaints involved annual percentage rates, identity theft and fraud. When a credit card company offered monetary relief to a consumer, the most common amount provided was $25.

In addition to publishing credit card complaint information from the previous year, the CFPB says credit card dispute details will be made public going forward. The bureau is publishing the data on its online Consumer Complaint Database.

While consumer names, addresses and account details will be hidden, other complaint information will be published. This information includes the name of bank, the zip code from which the complaint originated and the type of dispute. The database also tracks how each complaint was closed.

"Each and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight," said CFPB Director Richard Cordray in a statement. "By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market."

As with mortgage complaints, credit card complaints are sent to the company for its review and response. The CFPB then prioritizes its investigations to focus on those cases in which the company fails to provide a timely response or the consumer disputes the company response.

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