Americans filed a record number of complaints with the Consumer Financial Protection Bureau in March as the coronavirus pandemic began to flood hospitals and skyrocket unemployment rates.
Every month since, the number of consumer complaints has broken records set the previous month, according to a report released Friday by consumer advocacy group US PIRG and the Frontier Group, a left-wing think tank.
The CFPB received 29,494 complaints in March regarding various types of alleged consumer abuse – this number rose to 37,926 in June.
In a complaint last month, a homeowner spoke of entering into a forbearance agreement with his loan officer due to the outbreak. “Now they’re asking for a lump sum payment, which I can’t make. I have been home for 16 years, ”the person wrote in his complaint.
In another complaint last month, the consumer described transactions with an auto lender who insisted on payment. “It’s a horrible company that says they love and honor veterans, but only those who don’t have financial problems. They harass and don’t care about those of us in tough times, and many will soon find out, ”the borrower wrote.
The Trump administration “doesn’t want to admit how bad the economy is, just as it doesn’t want to admit how bad the pandemic is,” said one of the report’s authors, Senior Director Ed Mierzwinski, Federal consumer program in the United States. PIRG.
The increase in the number of complaints contradicts the administration’s public claims about the economy, Mierzwinski said. “The database is like a canary in the coal mine. The point is, there should be more effort in the office.
The consumer watchdog has taken the opposite approach, Mierzwinski said. For example, he pointed to the CPFB final rule, released earlier this month, that revoked the requirement of 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 ruled that the agency, created under the Obama administration, could continue to operate. The president can remove the director as he sees fit, the High Court said.
Consumers can complain to the CFPB about alleged errors in credit reports, debt collection practices, student loans, or issues with their bank and their credit card company. Alleged credit report issues have been the largest complaint category since the database launched in 2012.
The trend 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 personal consumption 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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Cash-strapped consumers may be complaining more than ever about their credit reports, Mierzwinski said, as they find problems with their report after being turned down for a loan.
Despite the efforts of consumer groups, the $ 2.2 trillion stimulus bill passed in late March did not ban negative credit reports, he said.
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The CFPB on Friday rejected 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 at work, which is the truth on the ground,” said spokesman Matthew Leas. “The office has aggressively used our regulatory, supervisory, consumer education and enforcement tools to protect consumers.”
Consumers sent about 187,000 complaints this year and about 8,000 of them made reference to the outbreak, he said.
Many consumers end up with “positive results” after filing a complaint, Leas said, noting that these complaints are reviewed internally and shared with various federal and state authorities.
“The agency, as always, will continue to deal with complaints as they arise and will continue our strong record on consumer protection,” he said.
The agency also recently showed how the epidemic is having an impact on consumers. About 20% of complaints Related to mortgages, credit cards and credit reports include keywords related to the coronavirus, he said.
In more than half of mortgage complaints about the outbreak, the CFPB said consumers noted they had problems paying their bills.
The CFPB has handled more than 2.3 million consumer complaints since its launch in 2011.
Senator Elizabeth Warren, a Democratic senator from Massachusetts who originally proposed the CFPB, said on Friday that the consumer complaints database was a critical part of the agency.
These complaints serve as a real-time “heat map” to spot emerging issues, she told a panel hosted 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 complaints with the CFPB about credit card disputes and other matters.
“They have the whole story to tell,” Warren said. “It was [their] way of saying, ‘Look, 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 mostly did was sit on their hands. Wall Street knows it. The crooks know this.