Federal consumer agency faces growing pains
WASHINGTON -- About 38% of credit card customers who complained to a new federal agency received some kind of monetary settlement with their credit card company, typically getting $127 taken off their bill.
For mortgage customers, 11% received some kind of monetary satisfaction — typically $400.
Those numbers, gleaned from data on 42,922 complaints to the Consumer Financial Protection Bureau obtained by USA TODAY under the Freedom of Information Act, reveal a system in which consumers are still mostly at the mercy of their banks in resolving problems.
While customers aren't always satisfied — 39% of those who responded told the agency they're still unhappy at the end of the process — banks respond within the agency's 15-day period 95% of the time.
The agency says the numbers don't reflect that many consumers get non-monetary help — such as foreclosure alternatives, ending debt collection calls, and correcting submissions to a credit bureau — after complaining.
The CFPB, created under the Dodd-Frank Act of 2009, set up an online portal at consumerfinance.gov/complaint to take consumer complaints about the mortgage, credit card, banking, consumer loan and student loan industries.
The bureau has taken credit card complaints twice as long, but mortgages have have already taken over as the top consumer concern.
"That's interesting. It's not surprising, but interesting," said Ruth Susswein of Consumer Action. "There are so many people who are in the midst of a mortgage problem, and there are so few avenues for consumers to turn to."
Most mortgage complaints come from the borrowers in the most trouble: 55% concern foreclosures or modifications. Another 26% are on other servicing issues; 9% are about applications.
Credit card holders most often cite "billing disputes" as the problem. But banks argue that could be misleading, because the complaint often isn't with the credit card — it's the merchant.
Another source of credit card complaints — identity theft and fraud — may not be the card issuer's fault, either. The industry says some credit repair agencies have encouraged clients to file complaints. "They were trying to improve people's credit histories, and they were saying, 'Dispute everything,' " said Nessa Feddis, vice president of the American Bankers Association. "The idea was just to create confusion and make it look as if they're doing something for the consumer."
One ZIP code in Boca Raton, Fla. had 298 complaints to the agency as of May 10 — as many as the next 10 ZIP codes combined. Most of those dealt with allegations of fraud. Neither the CFPB nor the Treasury Department, where many of those complaints were first filed, would discuss the contents of those complaints.
CFPB officials say they can't get involved in mediating every dispute. But they do give extra scrutiny where there's a pattern of dissatisfied customers or non-responsive companies.
"Complaints where the company did not provide a response - those are obviously very important to us. Or where the consumer disputes the company's response," said Darian Dorsey, a policy analyst for the agency. Those complaints are also prioritized for a closer look by the CFPB.
One student loan servicer, American Education Services, has turned down 101 complaints without giving customers relief in a single one. Spokesman Mike Reiber said that the company simply services loans owned by other investors, and often doesn't have the authority to resolve complaints.
USAA, a financial services company catering to military families, had 52% of its complaints past due — the highest of any major company. Spokeswoman Rebecca Hirsch said the past-due complaints represent "a miniscule portion" of its 6 million customers. "USAA works hard to fully research and address each member complaint," she said. "Nevertheless there are instances that require more time to ensure that we respond fully to our member's concerns."
