US Consumer Watchdog Receives More Than 5,000 Credit Card Complaints In 3 Months
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Newly formed US consumer watchdog, the Consumer Financial Protection Bureau (CFPB), has received more than 5,000 complaints about credit card companies during in its first three months of operations, with the most common gripe among credit card customers being billing disputes and interest rate problems, reported the agency on Wednesday.
Newly formed US consumer watchdog, the Consumer Financial Protection Bureau (CFPB), has received more than 5,000 complaints about credit card companies during in its first three months of operations, with the most common gripe among credit card customers being billing disputes and interest rate problems, reported the agency on Wednesday.
[quote]”When consumers contact us, we get a snapshot of how the consumer finance markets are working,” said Raj Date, the Treasury Department adviser running the CFPB, in a statement quoted by Reuters. “And we are learning that there is a lot of consumer confusion about credit card terms.”[/quote]Related: Credit Card Application Guide
Related: Debit Cards versus Credit Cards
The agency, which was created as a result of the Dodd-Frank act last year, is mandated with issuing public reports on the complaints it receives. Although the agency plans to eventually field complaints about a full range of financial products, it decided to start by focusing on credit cards when it officially got up and running on July 21.
Since then, 13.4 percent of the complaints forwarded to the CFPB have been billing disputes. Interest rates disputes came in second at 11 percent of the complaints, while complaints about identity theft and other fraud issues were also prevalent at 10.8 percent.
According to the CFPB, 74 percent of the complaints filed have been resolved. 13 percent of the consumers involved in these cases though, have disputed the way the credit card companies resolved their complaints.
[quote]Many complaints show consumers struggling to understand the terms of credit cards and associated products like debt-protection services,” said the report. “These complaints show a mismatch between consumer expectations and the way the product functions.”[/quote]The American Bankers Association though have asserted that resolving customer complaints was the priority of all financial institutions, with the data showing that the industry was actually doing a good job.
[quote]”There are more than 383 million credit card accounts in the US, and less than one-tenth of 1 percent of those have submitted a complaint to the bureau,” said Kenneth Clayton, the trade group’s chief counsel, to the Los Angeles Times. [/quote]Related: Credit Cards
Related: The World’s Worst Credit Cards
“We look forward to working with the bureau to implement effective consumer response systems to ensure they gather and report meaningful data that will help resolve complaints and identify trends,” added Clayton, in a press release cited by Reuters.
Apart from its report, the CFPB also announced on Wednesday that it would start taking complaints on a far more contentious issue: home mortgages. The system will be ready for “a majority of consumer financial product complaints and inquiries” by the end of 2012, according to a statement by the bureau.
