Credit Card Complaints Reveal Big Divide Between Users, Issuers

Updated 01.05.2012:
After receiving a first wave of more than 5,000 credit card complaints, the Consumer Financial Protection Bureau has gotten a good dose of the troubling divide that exists between consumers and credit card issuers.
The most prevalent issue is a vast misunderstanding of the issuer’s card agreement terms and associated products, such as services to protect a customer’s outstanding debt or monitor credit reports at additional costs.
“Many complaints show consumers struggling to understand the terms of credit cards and associated products … These show a mismatch between consumer understanding and product function or issuer practice,” summarized the consumer agency’s first report on credit card complaints.
There is also a large batch of complaints in which the card issuer and consumer give conflicting factual accounts. In many such cases, however, issuers have been willing to resolve the complaint, the agency said.
Another big concern is the occurrences of allegedly fraudulent charges to consumers’ credit cards made by third parties.
“The complaint system has identified recurring scams and helped to obtain redress for defrauded consumers,” the CFPB said. “In some cases, the Bureau has conferred with appropriate criminal authorities.”
So far, the agency has resolved nearly three-quarters of the complaints it received through Oct. 21, and it plans to expand its Consumer Response complaint system to new categories of financial products. Inquiries on mortgages and other home-secured loans could be ready for processing in the first quarter of this year.  A system to accept and resolve complaints on most financial products will be ready by the end of the year.
The Dodd-Frank Act requires that the CFPB provide public reports about the complaints it receives. The CFPB also has to come up with a policy for its disclosure of certain aspects of credit card complaint data, an issue of interest to both card issuers and consumer advocates.
To submit a credit card complaint or learn more about the CFPB, go to the agency’s website at ConsumerFinance.gov.
The top ten credit card complaints:

Rank
Issue
Complaints
% of total
1. Billing disputes
681
13.4%
2. APR or interest rate
556
11.0%
3. Identity Theft / Fraud / Embezzlement
546
10.8%
4. Other 454 8.9%
454
8.9%
5. Closing / Cancelling account
242
4.8%
6. Credit card payment / Debt protection
224
4.4%
7. Other Fee
224
4.4%
8. Billing statement
209
4.1%
9. Collection practices
201
4.0%
10. Credit reporting
197
3.9%

Source: Consumer Financial Protection Bureau

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