Study: CFPB complaints shattered records in 2020, exposing how the COVID-19 pandemic battered consumer finances

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Arizona PIRG Education Fund

Consumer complaints about problems with financial companies such as banks, credit bureaus and debt collectors rose by more than 50 percent in 2020 and set new records for each month of the year, according to a new report from the Arizona PIRG Education Fund. The report, Consumers In Peril, which analyzed complaints received by the Consumer Financial Protection Bureau (CFPB), was released as part of National Consumer Protection Week.

More than half of total complaints to the CFPB were grievances against the Big 3 credit reporting agencies; the firms Experian, TransUnion and Equifax, in that order, led complaints against all companies. Overall, the number of complaints about credit reporting doubled in 2020, demonstrating what a headache this industry causes.

“Mistakes in credit reports lead to lower credit scores and denial of credit, housing or employment,” said Lucy Baker, representative of the Arizona PIRG Education Fund. “The hands-off approach of the previous Administration exacerbated family finance problems during a pandemic that had already left many consumers teetering on the edge of financial ruin.”

According to the Arizona PIRG Education Fund report, the number 1 problem Arizona consumers complained to the CFPB about was incorrect information on a credit report. The organization said that their analysis of complaints in the CFPB’s Consumer Complaint Database highlights the problems consumers have faced during the coronavirus pandemic and the action needed to be taken by policymakers.

Baker stated, “Consumers need protections and relief from their inability to pay bills during the entire pandemic period, plus a reasonable recovery period. Consumers need permanent credit reporting reforms and protection from predatory lending. And consumers need the CFPB to be restored to start fixing rules, jumpstart investigations, and make the Consumer Complaint Database once again easy to find and use.”

“The surge in complaints is a signal of the strain the pandemic put on consumers, and of the minefield of tricks and traps they face in the financial marketplace,” added Gideon Weissman, Frontier Group analyst and report co-author. “Americans who share their stories are telling us exactly what kinds of help they need, and the CFPB would do well to start listening and responding.”