CFPB consumer complaints soar as coronavirus outbreak continues

Americans filed a record number of complaints with the Office of Consumer Financial Protection in March, when the coronavirus pandemic began flooding hospitals and raising unemployment rates.

Every month since then, consumer complaint numbers have reached record levels set the previous month, according to a report Friday by consumer advocacy group US PIRG and the Frontier Group, a group of left-leaning experts.

The CFPB received 29,494 complaints in March about various types of alleged mistreatment of consumers; That number increased to 37,926 in June.

In a complaint last month, a homeowner discussed signing a mortgage leniency agreement with his loan servicer due to the outbreak. “Now, they request a lump sum payment, which I cannot do. I have been in my home for 16 years, ”the person wrote in his complaint.

In another complaint last month, the consumer described deals with an auto lender that insisted on payment. “This is a horrible company that says it loves and honors veterans, yet only those who are not in financial trouble. They harass and we don’t care about those of us in difficult times, and many will know soon, ”wrote the borrower.

The Trump administration “does not want to admit how bad the economy is, just as it does not want to admit how bad the pandemic is,” said one of the report’s authors, Ed Mierzwinski, senior director, the US federal consumer program. .PIRG.

Growing complaint totals contradict the administration’s public claims about the economy, Mierzwinski said. “The database is like a canary in the coal mine. The fact is, more should be done in the office. ”

The consumer watchdog agency has been taking the opposite approach, Mierzwinski said. For example, he noted the CPFB’s final rule, issued earlier this month, which revoked the requirement for a payday lender to verify that a person could repay a loan.

The new report comes less than a month after the United States Supreme Court decided that the agency, created during the Obama administration, could continue to operate. The president can remove the director at will, the higher court said.

Consumers can file a complaint with the CFPB about alleged errors in credit reports, debt collection practices, student loans, or problems with their bank and credit card company. Alleged credit reporting issues have been the largest claim category since the database was launched in 2012.

The trend has strengthened during the pandemic, the US PIRG report noted. Between March and June, consumers submitted 85,185 complaints about credit reports, credit repair services and other types of consumer personal reports. That’s an 86% increase from the 45,722 complaints filed on credit reports in the same four-month period last year.

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Consumers with liquidity problems may be complaining about their credit reports more than ever, Mierzwinski said, because they are encountering problems on their report after being turned down for a loan.

Despite the efforts of consumer advocacy groups, the $ 2.2 trillion stimulus bill passed in late March did not ban negative credit reporting, he said.

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The CFPB rejected on Friday the idea that it was not doing enough for consumers. “The recent report is based on a false narrative and does not represent a reflection of a CFPB working hard, which is the fundamental truth,” said spokesman Matthew Leas. “The office has aggressively used our regulatory, oversight, consumer education and enforcement tools to protect consumers.”

Consumers have submitted approximately 187,000 complaints this year, and approximately 8,000 of them have referenced the outbreak, he said.

Many consumers end up with “positive results” after filing a complaint, Leas said, noting that those complaints are reviewed internally and shared with various federal and state authorities.

“The agency, as always, will continue to address complaints as they arise and will continue our strong record of protecting consumers,” he said.

The agency also recently showed how much the outbreak is affecting consumers. Approximately 20% of complaints related to mortgages, credit cards and credit reports include keywords related to the coronavirus, he said.

In more than half of the mortgage complaints about the outbreak, the CFPB said consumers noted that they had trouble paying their bills.

The CFPB has handled more than 2.3 million consumer complaints since its launch in 2011.

Senator Elizabeth Warren, a Massachusetts Democratic senator who initially proposed the CFPB, said Friday that the database of consumer complaints was a critical part of the agency.

Those complaints serve as a real-time “heat map” to spot emerging problems, he said during a panel organized by Americans for Financial Reform, a left-wing consumer advocacy coalition. Complaints are also important because they give consumers a voice, Warren added.

The senator and former presidential candidate said she often meets people who tell her they have filed CFPB complaints about credit card disputes and other matters.

“They have the whole story to play out,” Warren said. “Was [their] way of saying: ‘Listen, buster, you cheated on me and I want a public record.’ ”

Like Mierzwinski, Warren was critical of the agency under the Trump administration. “What they have done most is sit on their hands. Wall Street knows it. Scammers know this.