Bulletin
Investor Alert

March 5, 2021, 12:18 p.m. EST

U.S. consumers made a record number of complaints in 2020 — this was their No. 1 grievance

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Experian PLC (EXPN)
  • X
    TransUnion (TRU)
  • X
    Equifax Inc. (EFX)

or Cancel Already have a watchlist? Log In

By Meera Jagannathan

The Consumer Financial Protection Bureau received a record number of consumer complaints in 2020, with credit-reporting complaints making up a majority of the grievances, according to study released Monday by the U.S. PIRG Education Fund .

The number of complaints about consumer financial products and services surged by more than 50% between 2019 and 2020, found the watchdog group’s analysis of the CFPB’s consumer complaint database — increasing to 444,551 from their previous record high of 277,366 a year earlier.

“In 2020, each month set a complaint volume record for that month, and complaint volumes dramatically increased during the course of the coronavirus pandemic,” the report authors wrote.

Experts say President Biden’s CFPB will likely be more aggressive in tackling predatory behavior and doling out penalties, as well as bolster consumer protections in areas like payday lending, overdraft fees, consumer data and credit reports. The Biden-era CFPB is also expected to undertake stronger scrutiny of the student-loan industry, experts and former staffers say

Incorrect credit-report information

But there was one problem that beat out all others for complaints.

Credit-reporting complaints more than doubled from 136,000 in 2019 to 282,000 in 2020, and made up about 63% of all 2020 complaints, PIRG found. Almost nine out of 10 credit-reporting complaints were about Big Three credit-reporting agencies Experian /zigman2/quotes/210252954/delayed UK:EXPN +1.88% (86,600 complaints), TransUnion /zigman2/quotes/209192458/composite TRU +0.91% (83,300 complaints) and Equifax /zigman2/quotes/208789454/composite EFX +1.40% (76,300 complaints).

Francis Creighton, the president and CEO of the Consumer Data Industry Association, a trade group that represents all three agencies, said the industry’s internal data showed no evidence that complaint activity reflected a credit-reporting problem.

“There is real evidence, however, that there are organizations, like credit-repair companies, that try to take advantage of consumers by promising they can take negative, but accurate information off of credit reports for a fee,” Creighton told MarketWatch in a statement. “Additionally, these same companies are abusing the CFPB complaint portal with numerous and repeated frivolous disputes.”

He also noted that Equifax, Experian and TransUnion announced last April during the start of the pandemic that they would provide Americans with free weekly credit reports for the next year. “While disputes are required to be resolved within 30 days, the majority are resolved within two weeks,” he said. “If the dispute extends beyond that time frame, the law requires that the disputed information must be removed from the credit report.”

A majority of credit-reporting complaints were related to “incorrect information on your report,” with most of those incorrect-information complaints categorized as “information belongs to someone else.” About one out of five consumer-complaint narratives about information belonging to someone else mentioned identity theft, the report said.

The Big Three credit bureaus also led the list of the overall “top 10 most-complained-about companies” by a large margin. That list also included a number of banks.

“Analysis of complaint volumes and the types of complaints received shows that, as consumers dealt with the economic fallout of the pandemic, they increasingly faced problems with financial companies,” the report said. “The CFPB, the Biden administration and Congressional policymakers should take immediate and longer-term actions to protect consumers and rein in unfair practices in the financial marketplace.”

President Biden has nominated Federal Trade Commissioner Rohit Chopra, a Sen. Elizabeth Warren (D., Mass.) ally who served as the CFPB’s first student-loan ombudsman, to lead the Bureau. Biden selected Dave Uejio to serve as the Bureau’s acting director after taking office in January.

A CFPB spokesperson declined to comment on the PIRG report, but acknowledged in a statement to MarketWatch that consumers had submitted “significantly more complaints during the pandemic.”

“Complaints are the lifeblood of the CFPB and they drive the agency’s strategic thinking. The high complaint volume during COVID-19 is one of the reasons why Acting Director Uejio announced that responding to economic hardship associated with COVID-19 is one of the agency’s two priorities, along with promoting racial equity,” the spokesperson said. 

“The CFPB takes companies’ responsiveness to these complaints very seriously, and we are looking at how companies respond to complaints and what those complaints say when determining whether to prioritize exams or law enforcement action,” they added.

The CFPB penalized financial firms less during the Trump administration. Black Americans were hardest hit under the Trump-era CFPB . After Trump took office, consumers in predominantly Black or lower-income ZIP codes who issued complaints were less likely to get financial restitution than those in white-majority ZIP codes, according to a recently published working paper from Boston College researchers. 

(The CFPB at the time said it hadn’t had an opportunity to review the study’s findings and was therefore unable to comment.)

The U.S. PIRG report issued several recommendations, including the prompt Senate confirmation of Chopra and “comprehensive and permanent credit-reporting reforms,” such as access to free credit scores and a better process for disputing credit-report errors.  

“We urge the Consumer Bureau to start fixing rules, jumpstart investigations, and make the Consumer Complaint Database easy to find and use again,” the authors added. “In other words, consumers need a government on their side, especially during this time. Consumers deserve no less.”

Also read: Consumer complaints to the CFPB are skyrocketing as the coronavirus outbreak continues

/zigman2/quotes/210252954/delayed
UK : U.K.: London
2,716.00 p
+50.00 +1.88%
Volume: 1.61M
April 16, 2021 4:35p
P/E Ratio
47.94
Dividend Yield
1.35%
Market Cap
£24.35 billion
Rev. per Employee
£229,116
loading...
/zigman2/quotes/209192458/composite
US : U.S.: NYSE
$ 96.35
+0.87 +0.91%
Volume: 1.15M
April 16, 2021 4:00p
P/E Ratio
53.98
Dividend Yield
0.31%
Market Cap
$18.26 billion
Rev. per Employee
$331,293
loading...
/zigman2/quotes/208789454/composite
US : U.S.: NYSE
$ 190.98
+2.63 +1.40%
Volume: 801,767
April 16, 2021 4:00p
P/E Ratio
46.26
Dividend Yield
0.82%
Market Cap
$23.06 billion
Rev. per Employee
$362,061
loading...

This Story has 0 Comments
Be the first to comment
More News In
Personal Finance

Story Conversation

Commenting FAQs »

Rates »

Partner Center

Link to MarketWatch's Slice.