Mortgage

CFPB complaints skyrocket as credit score reporting points prime the record once more

More than half a million consumers flooded the Bureau of Consumer Financial Protection with complaints last year – and while some of the complaints were pandemic-related, the vast majority cited inaccurate information in credit reports.

Complaints to the CFPB rose 54% to 542,300 in 2020, according to an annual report to Congress released by the office on Wednesday.

During the pandemic, the office issued bulletins analyzing thousands of complaints that mentioned the coronavirus and related terms. "The pandemic was one of the most disruptive long-term events we will see in our lives," said Dave Uejio, deputy director of the CFPB, in a press release. "Unsurprisingly, the shock waves it sent across the planet were deeply felt in the consumer financial market."

However, these complaints accounted for 5.9% of the total. Credit and consumer reporting has been at the top of the CFPB's complaint list for years, accounting for nearly 60% of all complaints last year, up from 44% in 2019.

A significant portion of the complaints in 2020 concerned attempts to address identity theft-related issues, according to the CFPB. It is planned to publish a separate report later this year on the handling of complaints by the three major credit bureaus Equifax, Experian and TransUnion. Companies did not immediately respond to requests for comment.

While the credit bureaus usually give detailed answers to complaints, the CFPB stated that it “no longer gives complete and accurate answers” ​​to many complaints. Instead, the bureaus found that a lawsuit had been filed "but otherwise failed to address the issues consumers raised in their complaints".

The CEO of the Consumer Data Industry Association – a trading group that includes Equifax, Experian and TransUnion – accused "predatory" credit repair companies of increasing the number of complaints against credit bureaus.

"They are essentially spamming the Complaints Portal [CFPB], making it difficult to help consumers with legitimate problems," Francis Creighton said in an email to American Banker.

The industry with the second highest number of complaints was debt collection with 15% of all complaints last year.

Last month, Uejio called on financial companies to respond to complaints across the board. He also said the office plans to analyze differences in the way companies handle minority complaints compared to those of white consumers.

"The CFPB expects companies to respond to these concerns and to provide consumers with responses from companies addressing the issues that consumers are addressing in their complaints," Uejio said in a press release on Wednesday.

The biggest concern for banks and financial services providers is that the CFPB is using complaint data to get companies involved in supervisory and enforcement action. The CFPB usually sends consumer complaints directly to companies, which usually have to respond within 15 days.

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