July 2016

Credit Cards under the CFPB Spotlight in June 2016

2 min

As of July 1, 2016, the Bureau has handled approximately 97,100 credit card-related complaints. Consumer complaints span the breadth of the credit extension process; key complaints include the following:

  • Perceived unfairness in credit decisions: The Bureau reports that consumers frequently complained about trouble understanding the decisions made by credit card companies regarding the consumer's initial application for a card, as well as changes made to the interest rate charged.
  • Payment confusion: The Bureau reports that consumers complained about how payments are applied to accounts that have more than one balance. Consumers indicated that they were not clearly informed how the payments they made were applied and were upset when their payments did not first go to pay off the most time-sensitive balances.
  • Inadequate fee disclosure: The Bureau reports that consumers complained about various fees and additional costs on their credit cards. According to the CFPB, consumers believed that they were unfairly charged when an automatic payment failed or when a billing statement was not delivered to them by the credit card company in a timely manner.
  • Misleading rewards programs: The Bureau reports that consumers complained of difficulty receiving benefits promised to them through special rewards programs. According to the CFPB, consumers indicated that the terms and conditions of some rewards programs (including bonus points or miles programs, cash back programs, and travel benefits programs) were not adequately explained to them when they signed up for their credit card.

National Complaint Overview

As of July 1, 2016, the CFPB has handled approximately 930,700 complaints nationally. For the month of June, debt collection practices resulted in the highest number of complaints across all consumer financial products and services – 7,032 out of 24,500 complaints handled in June. Credit reporting constituted the next highest complaint volume for June, accounting for 5,001 out of 24,500 complaints. With 4,323 out of 24,500 complaints, mortgages were the third highest complained-of financial product or service.

Consumer complaints help direct the Bureau's attention and can result in inquiries, investigations, and, potentially, enforcement actions. Industry participants are advised to monitor trends in complaints, to be able to anticipate and respond to key areas of the Bureau's focus.