In its first three months ending Oct. 21, the Consumer Financial Protection Bureau logged 5,074 credit card complaints from the public – 84 percent of which have been sent to the card issuer for resolution.
Nearly three-quarters of the complaints were resolved fully or partially by the credit card issuer, the CFPB reported.
The rest of the complaints were deemed incomplete, either because the consumer provided insufficient identifying information or because the consumer requested that the complaint not be sent to the issuer for a response. The remaining complaints were still pending on Nov. 15, the CFPB said yesterday.
The most common complaints had to do with billing disputes, interest rates, the cancelling of accounts or some type of fraud, including identity theft. Overall, the agency found that many consumers did not understand certain terms of their credit card agreements.
“When consumers contact us, we get a snapshot of how the consumer finance markets are working,” said Raj Date, Special Advisor to the Secretary of the Treasury on the CFPB. “And we are learning that there is a lot of consumer confusion about credit card terms. We will continue to work with consumers, credit card companies, government agencies, and others to improve consumer education and ensure CFPB’s regulation, supervision, and enforcement efforts are effective.”
The U.S. agency was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act and launched July 21. A key component of the CFPB’s mission is to respond to complaints from consumers about financial products and services. It is also embarking on a review of existing regulations that touch a wide swath of financial products, including mortgages, credit cards and payday loans.
The CFPB report on credit card complaints came up with three key findings:
- Consumer Confusion: Consumers are struggling to understand the terms of credit cards and associated products, such as debt protection services. These complaints show a mismatch between consumer expectations and the way the product functions.
- Third-Party Fraud: The complaints show some alleged fraudulent credit card charges made by third parties. In some cases, the CFPB has consulted with the appropriate criminal authorities.
- Factual Disputes: There are a large volume of complaints regarding factual disputes between consumer and issuer. The Bureau has generally found that issuers have been willing to resolve these complaints.
For more information, visit www.ConsumerFinance.gov.