Consumers in peril
CFPB data shows consumer problems in year of COVID-19
U.S. PIRG Education Fund report documents that complaints to the CFPB, led by complaints about credit bureaus, set new records in 2020.
A review of the Consumer Financial Protection Bureau’s public complaint database finds that consumer complaints about financial grievances spiked during the pandemic year of 2020, eclipsing 2019, the previous record year.
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 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.
The urgent need for CFPB action is shown by a recent statement of its new acting director, Dave Uejio:
“One thing we can do immediately is focus our supervision and enforcement tools on overseeing the companies responsible for COVID relief. I am concerned about the findings described in last week’s Supervisory Highlights edition that companies are failing to properly administer relief through the crisis.”
Early in the pandemic, under the previous administration:
“The Bureau issued a number of statements that provided entities with temporary regulatory relief. The Bureau also announced that, in certain instances, the Bureau would take a flexible supervisory and enforcement approach during the pandemic.”
The statements and supervisory guidances are archived by the CFPB.
A series of previous reports during the pandemic by U.S. PIRG Education Fund and Frontier Group has tracked the increasing problems consumers faced with family finances during the pandemic; we found that those problems were exacerbated by the Bureau’s lax approach to enforcement in 2020.
The CFPB received nearly 450,000 consumer complaints in 2020
2020 was a record-setting year for the number of complaints received by the CFPB’s Consumer Complaints Database.
In 2020, there were 444,551 complaints — more than 50% higher than the 277,366 complaints in 2019, which at that time was the most complaints ever received in a year.
In December 2020, the top complaint month, there were 48,558 complaints — more than double the number of complaints in December 2019. In 2020, each month set a complaint volume record for that month, and complaint volumes dramatically increased during the course of the coronavirus pandemic.
Figure 1. 2020 set complaint volume records every month of the year
Credit reporting complaints skyrocketed
In 2020, complaints about credit reporting saw dramatic increases from previous years, and accounted for the majority of all complaints. There were 282,000 complaints about the sub-product “credit reporting,” or more than double the 136,000 credit reporting complaints from 2019. Credit reporting complaints accounted for 63% of all complaints submitted in 2020.
Among credit reporting complaints, the majority were for problems with “Incorrect information on your report,” and most of those complaints – 141,000 – had to do with problems tagged as “information belongs to someone else.” Among consumer complaint narratives (the full text of the complaint, which consumers can choose to make public) for complaints that credit report information belongs to someone else, more than one in five contained the words “identity theft.”
Nearly nine in 10 credit reporting complaints involved one of the U.S. Big Three credit bureaus: Experian was the subject of 86,600 credit reporting complaints, TransUnion 83,300 complaints, and Equifax 76,300 complaints. These 246,000 complaints alone account for more than half of all complaints received by the CFPB in 2020.
Figure 2: Big Three credit bureaus accounted for more than half of all complaints in 2020