As the CFPB and other regulators continue COVID-19-related look-back reviews and ramp up enforcement actions dealing with pandemic issues, consumer complaints from this period will be an important indicator of where the Bureau and others may focus. The CFPB’s 2020 Annual Report highlights the agency’s consumer complaint activities in 2020, focusing on the impact of the COVID-19 pandemic on consumers. Acting Director David Uejio described the last year as “unprecedented,” as reflected in the uptick in consumer complaints. Indeed, the Bureau received more than 540,000 consumer complaints in 2020, nearly twice as many as the 300,000 complaints that the Bureau typically handles in a year.
The Bureau saw a marked increase in consumer complaints, particularly concerning credit reporting and credit cards, after the COVID-19 national emergency was declared in March 2020. The Report notes that, beginning in April 2020, consumers submitted more than 3,000 complaints each month that specifically mentioned coronavirus (or a related keyword), but cautions that the absence of such keywords does not mean that the complaint did not relate to the pandemic. In a year when the overall consumer complaint volume increased by an unprecedented amount, much of this increase in volume was attributable to consumer credit complaints, which saw the greatest year-over-year increase by volume of 107%. Many of these pandemic-related complaints concerned identity theft issues. Other types of consumer complaints that saw marked increases during 2020 as compared to 2019 included complaints about prepaid cards (106% increase), money transfer (56% increase), vehicle loans (20% increase), and credit cards (20% increase).
The Report stated that money transfer complaints rose during the pandemic as consumers complained about fraud or scams. The Bureau noted that consumers were contacted by charities to support medical procedures and obtain medical and protective supplies. The Report also noted a sharp uptick in credit card complaints as consumers reported difficulties in accessing merchant-issued refunds from sporting, entertainment, bookings, and travel cancellations due to COVID-19.
In some instances, the Bureau found evidence through the complaints that the legislative response to the pandemic had its intended effect of providing relief to consumers. For example, the Coronavirus Aid, Relief, and Economic Securities (CARES) Act allowed eligible homeowners to obtain mortgage forbearances and suspended principal payments and interest accrual for student loans, and, overall, complaints about both mortgages and student loans decreased in 2020. However, even with these federal programs, consumers complained about difficulty with servicing issues, enrolling in income-driven repayment plans, and obtaining information about pandemic relief measures.
As the Bureau continues to monitor trends in consumer complaints in a variety of population subcategories, such as servicemembers, veterans and military families, and older consumers, industry stakeholders may benefit from tracking the same data to identify compliance issues and risks.