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Financial Services Law Insights and Observations


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  • CFPB Monthly Complaint Snapshot Focuses on State-Level Consumer Complaints

    Consumer Finance

    On June 27, the CFPB released its monthly complaint report, highlighting complaints from around the country. According to the Bureau, it has handled over 1.2 million complaints from 2011 through June 1 of this year. The report shows nationwide complaint statistics and statistics for service members and older consumers. In addition, the report breaks down statistics on the state level covering financial products and services, company responses to complaints, as well as number of complaints. The vast majority of consumers report high company response rates to complaints averaging in the high 90 percent range, although the volume of complaints is trending upward. The top five products receiving complaints across the country in descending order are: (i) debt collection; (ii) mortgages; (iii) credit reporting; (iv) credit cards; and (v) bank accounts or services.

    Consumer Finance Lending Consumer Complaints Internet Lending CFPB Debt Collection Credit Cards Mortgage Servicing

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  • CFPB Monthly Complaint Snapshot Highlights Complaints from Older Consumers

    Consumer Finance

    On May 31, the CFPB released Vol. 23 of its Monthly Complaint Report. This month’s report highlights complaints from “older consumers” defined as those who voluntarily report their age as 62 or older. Since it began accepting complaints, the Bureau has received over 1 million complaints—more than 100,000 from older consumers. The report focuses on these complaints, with some of the most common in 2017 including:

    • Reverse mortgage servicing issues, which are unique to this group of consumers. Many of the complaints surround older consumers attempting to stay in their home after the death of the borrowing spouse, occasionally ending in foreclosure;
    • Financial scams and identity theft issues are often difficult to recover from—especially for consumers on fixed-incomes;
    • Credit card issues such as introductory offers may cause confusion for older consumers in understanding credit terms and conditions or the difference between zero interest and deferred interest. Additionally, many older consumers struggle with billing disputes, unwanted subscription services and credit monitoring; and
    • Escrow issues, especially when the consumer is trying to benefit from tax relief programs.

    The graph shown in a blog on the Bureau’s website compares complaints from consumers 62 and older with complaints from consumers under 62. Although both groups of consumers reported complaints for many of the same products, the graph shows that mortgages, debt collection and credit cards, in that order, are the top three products for those 62 and older—whereas debt collection, mortgages and credit reporting are the top three for those under 62. Additionally, the report reveals that almost a quarter of all complaints from older consumers came from residents of California, Texas, and Florida.

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  • CFPB Monthly Complaint Snapshot Highlights Issues Related to Student Loans


    On April 25, the CFPB released its monthly complaint report highlighting consumer complaints year-to-date April 1. The Bureau has handled approximately 1,163,200 consumer complaints across all categories since it began collecting complaints. Of the roughly 28,000 received in March, 2,033 focused on private and federal student loans. Common problems raised by student borrowers included:

    • lost documentation, extended application processing time, and unclear guidance when enrolling in income-driven repayment plans;
    • misapplied payments, such as overpayments being applied to all accounts instead of being applied to a specific account;
    • confusion over Public Student Loan Forgiveness programs and other loan forgiveness programs, specifically regarding enrollment issues, payment problems, and issues due to inaccurately reported employment data; and
    • credit reporting companies receiving incorrect data, resulting in negative scores or collection companies contacting consumers about accounts that were paid in full or for debts that were not owed.

    Similar to past CFPB-issued complaint snapshots, the report identifies the top 10 most common complaint categories with respect to all financial products, as well as the top 10 companies for which they received the most student loan complaints. The report spotlighted Nevada, noting that (i) Nevada consumers have submitted 14,600 of the 1,163,200 complaints received; (ii) debt collection complaints accounted for 29 percent of complaints received from Nevada, exceeding the national average by 2 percent; and (iii) mortgage-related complaints accounted for 23 percent of all complaints submitted by Nevada consumers, a rate equal to the national rate of mortgage complaints.

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  • Banking Regulator Admits to Flaws in Supervision of Community Banking Sales Practices

    Federal Issues

    On April 19, the OCC released a report detailing the results of an internal review that concedes the regulator’s oversight of a national bank’s consumer complaints and whistleblower cases was “untimely and ineffective” and that OCC supervisors missed or failed to address warning signs throughout the course of the bank regulator’s recent investigation. The objective of the internal review was to, among other things, “identify gaps in supervision,” and “[d]etermine if there are lessons learned that can result in improved supervision process.” The report—which was prepared by the OCC’s Office of Enterprise Governance (OEG) and the Ombudsman—concluded, among other things, that OCC supervisors had “focused too heavily on bank processes versus what those processes were actually reporting,” and notes that the OCC’s internal review “found no evidence that supervisory activities included in-depth review and testing of monitoring systems and controls” over incentives-based sales compensation or sales integrity. In addition to identifying “lessons learned” and “missed opportunities,” the report also sets forth general recommendations that it believes the OCC’s large bank supervision division should consider in order to improve their practices going forward, including that the regulator “[d]evelop an enterprise-wide whistleblower process and update external-facing interfaces . . . to inform the public or other governmental agencies how to communicate whistleblower information to the OCC,” and that it also “[e]nsure issues or concerns are followed through to effective corrective action.”

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  • Cordray Discusses Consumer Credit Reporting at Operation HOPE Global Forums Annual Meeting

    Consumer Finance

    On April 11, CFPB Director Richard Cordray delivered prepared remarks at the Operation HOPE Global Forums Annual Meeting in Atlanta addressing, among other things, financial challenges facing the “economically vulnerable”—most notably with respect to credit reporting and the handling of consumer disputes. As previously covered in InfoBytes, credit reporting was one of the top three consumer complaint categories for 2016. In his speech, Cordray cited a FTC study that found that “millions of people had an error on at least one of their credit reports that was serious enough to materially affect their credit score” and outlined the Bureau’s position for addressing these concerns such as (i) requiring credit reporting companies to improve quality control systems; (ii) creating easier access for consumer to dispute errors; and (iii) cleaning up information initially provided to the credit reporting companies by examining the ways in which banks and financial companies furnish the information.

    Consumer Finance CFPB Cordray Consumer Complaints Credit Scores Consumer Reporting Agency

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  • CFPB Issues Annual Consumer Complaint Report

    Consumer Finance

    On April 3, the CFPB published its Consumer Response Annual Report, providing a review of the CFPB’s complaint process and a description of complaints received during January 1 through December 31, 2016. According to the report, the Bureau handled 291,400 consumer complaints—a 7 percent increase from the total number of complaints in 2015. The top three categories, representing about 67 percent of complaints, were debt collection, credit reporting, and mortgages. The Bureau also received complaints related to bank services; credit and prepaid cards; consumer, student, and payday loans; and money transfers. Five years ago, the Bureau began accepting consumer complaints, and since then has handled, according to the CFPB, approximately 1,136,000 complaints.

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  • FTC Releases 2016 Annual Highlights

    Privacy, Cyber Risk & Data Security

    On March 28, the FTC released its 2016 Annual Highlights Report, which outlines the agency’s ongoing efforts over the past year to protect consumers and promote competition. Acting Chairman Maureen K. Olhausen stated, “2016 was a historic year for the FTC. We obtained almost $12 billion in redress for consumers, and took action in more than a dozen merger cases to preserve competition.” Key highlights in four sections—enforcement, policy, education, and stats and data—covered multiple sectors such as health care, technology, and other consumer products and services. Regarding enforcement highlights in 2016, the report covered a range of administrative and court actions related to, among other things, privacy and data security issues, particularly in the mobile marketplace, as well as the Commission’s largest false advertising settlement in its history with a global auto manufacturer. The policy section of the report highlights eight amicus briefs filed on topics such as reverse payments and the FDCPA, as well as its efforts to provide guidance and recommendations on topics such as sharing economy platforms, big data, and fraud. The education section covers topics such as consumer guidance on fraud, scams, and deceptive business practices prevention, and notes that it published almost 200 blog posts for consumers. Notably, according to the stats and data section of the report, the FTC received more than three million consumer complaints in 2016, consisting of 858,090 debt collection complaints, 503,967 “other” complaints, and 406,578 imposter scam complaints.

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  • CFPB Monthly Complaint Report Focuses on Credit Cards; 2016 Annual Report to Congress Highlights FDCPA Activities

    Consumer Finance

    On March 28, the CFPB released its monthly complaint report highlighting consumer complaints as of March 1 of this year. The report states that the Bureau has handled approximately 1,136,000 consumer complaints across all categories, of which 10 percent (116,200) relate to credit cards. A few of the most common findings raised by consumers are: (i) issues with fraudulent charges—both with respect to being billed for charges not initiated by them and experiencing difficulties having charges removed even after a dispute has been resolved in their favor; (ii) issues regarding reward program requirements and benefits; and (iii) issues regarding identity theft complaints, specifically with respect to “credit card accounts being fraudulently opened in their name even after an alert was placed on their credit file.” The report discloses that credit card complaints, along with complaints regarding debt collection practices, constituted the most prolific category of consumer complaints in February 2017. Credit reporting complaints and mortgage complaints are the second and third most common complaints, respectively. As previously reported in InfoBytes last month, student loan complaints continued to show the greatest increase year-over-year for the same three month time period of December to February—551 complaints from 2015/2016 versus 2,913 complaints in 2016/2017.

    Furthermore, the report’s geographic spotlight this month, Massachusetts, represented 1.8 percent of the total number of complaints nationally handled by the CFPB, and while debt collection complaints were “significantly lower” than the national average (20 percent as compared to 27 percent), the rate of mortgage complaints was roughly at the national average. 

    Also this month, on March 6, the CFPB submitted to Congress its sixth annual report summarizing its efforts to administer the FDCPA and highlighting the work done by the CFPB and the FTC, both of whom “work closely to coordinate” FDCPA enforcement actions (see prior InfoBytes coverage on FTC letter summary). The report discusses consumer complaints and debt collection enforcement activity, amicus briefs filed in FDCPA-related cases, consumer education efforts, and initiatives regarding rulemaking, research, and policy. FDCPA examinations performed in 2016 “identified a number of violations of the law …including false representations made by debt collectors to consumers, unlawful fees charged by debt collectors, and illegal disclosure of debts to third parties.” Furthermore, the examinations “also found instances in which debt sellers sold accounts for collection that did not properly reflect that the accounts were discharged in bankruptcy, were fraudulent, or had already been paid . . . Additionally . . . [i]n the cases that were concluded in 2016, $39 million was paid in restitution for consumers who were impacted by illegal debt collection practices and $20 million in civil penalties.”

    Consumer Finance CFPB Consumer Complaints FDCPA Congress

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  • NY AG Schneiderman Releases List of “Top Ten” Frauds for 2016

    State Issues

    On March 6, 2017, New York Attorney General Eric T. Schneiderman released the state’s 2016 top ten list of consumer fraud complaints. For the past 11 years, Internet-related complaints concerning service providers, data privacy and security, and consumer fraud topped the list, closely followed by complaints about automobile sales, service, financing, and repairs. Credit complaints about debt collection, billing, debt settlement, payday loads, credit repair and reporting agencies, and identity theft were sixth. Complaints related to mortgages were ninth. Not on the top ten list but highlighted by the Attorney General’s office were complaints involving scam student debt relief companies as well as two common schemes known as the IRS scam and the Grandparent scam. Also provided were tips consumers should use to protect themselves and their families.

    State Issues Consumer Finance Consumer Complaints Fraud State Attorney General

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  • CFPB Releases Supervisory Highlights Focused on Credit Reporting

    Consumer Finance

    On March 2, the CFPB released its Supervisory Highlights for winter 2017 that outlines supervisory and oversight actions the Bureau has taken to address issues in the credit reporting market. According to the CFPB’s February Monthly Complaint Report, the Bureau has handled approximately 185,700 credit reporting complaints since the Bureau’s inception. Examples of these complaints include that no action happens when consumers dispute items on their reports, that paid debts often show up as “unpaid,” and that consumers’ files are not updated to reflect changes or deletions which negatively affect their credit scores.

    The new Supervisory Highlights outlines the actions the Bureau has taken to address concerns, including the following:

    • Fixing data accuracy at consumer reporting companies, including instituting quality control programs and tests to identify mix-ups as well as improving corrective actions and preventative measures.
    • Directing consumer reporting companies to improve dispute investigation systems.
    • Directing furnishers supplying data to consumer reporting companies to ensure the integrity of the information, an effort that “includes better investigations and handling of disputes, notifying consumers of results, and taking corrective action when inaccurate information has been supplied.”

    As further explained, the CFPB uses the same supervision approach for credit reporting activities that it uses for other activities of supervised entities, which “includes a review of compliance systems and procedures, on-site examinations, discussions with relevant personnel, and requirements to produce relevant reports . . . [and, if violations are discovered], enforcement actions.” In addition, on the same day, the Bureau posted to its blog a guide to help consumers learn ways to monitor their credit history, including a list of several companies that claim to offer existing customers free access to credit scores.

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