Report: Consumer Credit Complaints Spike in 2020
A new report from the customer experience analytics company Stratifyd reveals a 58% year-over-year increase in complaints filed through the Consumer Financial Protection Bureau (CFPB) between 2019 and 2020. Credit reporting and credit repair had the highest YoY increase, but nearly all categories saw significant jumps in complaints.
Stratifyd relied on its AI-driven analytics platform to analyze and contextualize the 436,000 complaints that they found in the CFPB database. What immediately became apparent is the sheer increase in the number of complaints. While 2019 saw only an 11% increase in complaints compared to the previous year, CFPB complaints had a YoY surge of 58% in 2020.
Contrary to what one would expect, only 10% of the complaints analyzed contained terms relating to the pandemic. However, the pandemic exacerbated the financial issues that customers were facing.
Complaints pertaining to credit reports and credit repair services were the most common, accounting for 64% (279,570) of all complaints submitted. This is also the category with the highest complaint volume YoY increase of 102%.
There was also a major increase in complaints involving fraud and identity theft. This mirrored the pandemic-induced jump in digital payments - a sphere traditionally rife with fraudulent activity. As such, the money transfer/virtual currency category of complaints had the second-highest YoY increase in complaints of 59%.
The main grievances in the credit report/repair sector involved incorrect information on reports and identity theft - two interlocked issues. Some of the consumers were so aggrieved that they submitted duplicate complaints.
Other categories that saw significant spikes in complaints were mortgages, credit and prepaid cards, debt collection, and student debt.
Both customers facing fraud and those experiencing other financial difficulties felt frustrated by the lack of sympathy, urgency, and support coming from financial institutions. Customers facing debt that was not covered by relief programs were especially disappointed by the lack of empathy.
While federal and state relief programs are proving to be invaluable, it seems there’s still much work to be done when it comes to compassion from financial organizations.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
More from blog
Your email address will not be published.