The report, reflecting issues consumers reported to the CFPB in 2020, shows companies respond to most debt collection complaints in a timely manner and resolve with explanation.
Editor's note: This article contains updated information on credit reporting agencies' response to consumer complaints, highlighted in bold below.
The Consumer Financial Protection Bureau has released its Consumer Response Annual Report for 2020, which shows the CFPB handled approximately 542,300 complaints last year—a nearly 54% increase over the approximately 352,400 complaints handled in 2019, according to a news release.
The impact of the COVID-19 pandemic on the consumer financial marketplace is reflected in the increase of complaints submitted to the CFPB, it reports.
Credit and consumer reporting complaints accounted for more than 58% of complaints received by the CFPB, followed by debt collection (15%), credit card (7%), checking or savings (6%), and mortgage complaints (5%), according to the report.
“The pandemic has been among the most disruptive long-term events we will see in our lifetimes,” CFPB Acting Director Dave Uejio said in the news release on the report. “Not surprisingly, the shockwaves it sent across the planet were felt deeply in the consumer financial marketplace. Consumer complaints provide the CFPB with an important real-time window into where consumers encounter problems in the marketplace. The CFPB expects companies to respond to these concerns and that consumers receive responses from companies that address the issues consumers raise in their complaints.”
Debt collection complaints had a 97% response rate from companies and companies closed 85% of complaints with an explanation, 9% with nonmonetary relief, and 0.6% with monetary relief.
The CFPB received the most complaints about other debt, such as a phone bills, utilities and credit card debt.
Consumers also reported identity theft as a cause of having a debt in collection. These complaints have been increasing for several years, according to the report.
Consumers reported that they discovered the debt occurred because of identity theft by reviewing their credit reports. In response, they said third-party collectors would provide copies of validation notices and detailed information about where the debt originated. Some debt collectors discontinued collection efforts entirely.
Additional findings include:
- Beginning in April 2020, consumers began to submit more than 3,000 complaints mentioning coronavirus keywords nearly every month. Consumers submitted approximately 32,100 complaints mentioning coronavirus or related keywords in 2020. Absence of coronavirus as a keyword in a complaint does not necessarily mean the complaint was not related to the financial impact of the pandemic.
- Consumers from Florida submitted more complaints per capita than consumers from any other state (309 complaints submitted per 100,000 in population).
- The CFPB received 40,800 complaints from self-identified service members, veterans and military families.
- The CFPB received more complaints from consumers about inaccurate information on their credit and consumer reports in 2020 than in 2019.
- Consumers primarily submitted these complaints about the three largest nationwide credit reporting agencies: Equifax, Experian and TransUnion.
- While the Nationwide Credit Reporting Agencies (NCRAs) typically provided substantive and comparatively detailed responses to the majority of complaints in prior years—including providing details of dispute investigations and outlining steps taken for consumers that are attempting to address identity theft—this year, the CFPB observed that the NCRAs stopped providing complete and accurate responses in many of these complaints. The NCRAs provided closure responses noting that a dispute would be filed on the consumer’s behalf, but otherwise failed to address the issues consumers raise in their complaints. The NCRAs mentioned suspected third-party activity in their responses to consumers, but did not detail steps taken to authenticate consumers or to address the issues raised in their complaints.
The CFPB will issue a separate report later this year regarding complaints submitted about the credit reporting agencies that are related to incomplete or inaccurate information on consumers’ credit reports in keeping with its reporting requirements under the Fair Credit Reporting Act.
Debt collectors continue to help consumers manage their payments, provide resources on hardship programs and offer solutions that fit with their financial situation. Many ACA International members report that calls from consumers to the agencies were on the rise in recent months. Consumers sought help managing their finances and exploring hardship options as a result of the ongoing COVID-19 pandemic.
ACA also continues to advocate with the CFPB to ensure accurate data about the industry is documented in the database by providing context to the complaints and sound verification processes.