Credit card complaints show widespread confusion
NEW YORK—Interest rates and billing disputes are among the most common complaints about credit card services.
That's according to the first public report on credit card complaints issued by the Consumer Financial Protection Bureau, which said it fielded more than 5,000 complaints and questions in the three months after it opened for business this summer.
The agency, which was created by the financial overhaul known as 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 in late July.
The report issued Wednesday shows that complaints about credit cards were scattered across a wide range of issues, including collection practices, account closures, debt protection services, ID theft, fraud and fees. About three quarters of those were either fully or partially resolved by the credit card company, according to the CFPB.
The remaining complaints were either still under review or resulted in no relief.
When consumers submit a complaint, the agency acts as a facilitator in resolving the issue with the credit card issuer.
If appropriate, the agency forwards the complaint to the credit card issuer and asks for a response to the complaint on behalf of the consumer. The card issuer decides what action to take then reports back to the CFPB on how it responded.
Throughout the process, consumers can log onto the agency's "consumer portal" online or call a toll-free number to receive status updates.
Beyond the complaints it filed with credit card issuers, the Consumer Financial Protection Bureau said it fielded many more calls from consumers who simply had questions or feedback about the terms of their accounts. The agency said less than half the queries it received resulted in the filing of a credit card complaint with the card issuer.
That shows that consumers are struggling to understand the terms of their card agreements, showing a "mismatch between consumer expectations and the way the product functions," the report stated.
The agency said will use the complaints it receives to identify problems in the market. The agency will then determine how to address the problems, whether through consumer education or new regulatory policies.
The CFPB is working to expand its Consumer Response complaint system to address additional financial products; a system to handle complains about mortgages and other home-secured loans is expected to be available by year-end.
Consumers can submit complaints online or through a toll-free hotline.
Of those complaints, companies reported resolving 3,100. Consumers disputed the adequacy of response in 400 cases.
To file a complaint, consumers can call 855-411-CFPB or visit www.consumerfinance.gov.