Credit Card Complaints By the Numbers
The 1992 cult film Bob Roberts was a satirical mockumentary created by actor/director Tim Robbins. It depicted a right-wing politician played by Robbins who performed folk songs to deliver his conservative message on the campaign trail.
One of the songs that’s repeated with gusto by Robbins/Roberts several times in the film is the Complain song. Its opening stanza pretty much tells its story:
Some people must have
Some people have not
But they’ll complain and complain and complain and complain and complain.
Roberts was targeting his fictional “following” with a message extolling the virtues of hard-working Americans versus complaints from the presumptive tax-eaters. But there’s a U.S. government-backed organization whose purpose would be dear to Bob Roberts’s heart. It’s known as the Consumer Financial Protection Bureau, and it’s a business that fields consumer complaints year-round.
The CFPB is a federal agency focused solely on consumer financial protection, taking complaints from consumers who feel they’re getting a raw deal. They then compile those gripes into reports that outline three-months periods and provide it to Congress, giving our legislators a quarterly summary. The compilations provide a snapshot to our lawmakers of the challenges being faced by their constituents, presumably helping them understand ways they can craft new legal protections or do away with restrictive laws.
The CFPB was created in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It arrived in a period of tremendous financial upheaval, particularly with home mortgages. The new law was a way to head off future problems before they reached the tsunami levels of destruction wrought by the Great Recession era’s financial upheaval.
THE BIGGEST PROBLEMS
The most-complained about businesses for this year, found in the CFPB’s most recent report out at the end of last month, were the three credit reporting agencies: Equifax, TransUnion and Experian. Not surprisingly, credit card companies also ranked up there on the consumer hit parade, with credit card complaints rising 35 percent from a comparison with a similar three-month span in 2015.
Just behind the credit reporting bureaus in sheer volume of complaints were Citibank, Bank of America, Wells Fargo, JPMorgan Chase, and Capital One, all of them card-issuers.
Other areas of high conflict on the CFPB report include student loan services, bank accounts, consumer loan services, and particularly debt collection practices, with mortgage complaints winning the bronze medal for most complaints generated. As of Nov. 1 of this year, the CFPB handled approximately 1,035,200 complaints from people across the nation on all products.
Obviously, not every complaint is valid, and even though the total number of complaints is huge, the clear majority of customers in any business are satisfied. But since credit disputes can linger on your permanent record and damage future prospects, too many complaints for any company or business sector may be grounds for you to re-consider any acquisition of a particular card or service.
To provide a snapshot of CFPB activity, let’s look at October’s complaints. During that month, debt collection led the parade as the most complained-about financial product or service, registering 7,749 complaints out of a total of approximately 27,0000. The second-most complaint category was credit reporting, which weighed in at 5,369 complaints, followed by mortgages at 4,357 complaints.
The biggest rise in complaints in a year-to-year comparison of 2015 over the same time period this year, August to October, showed student loan complaints on the rise. They registered 1,272 complaints this year versus just 612 in 2015 over the same period.
Where you live also factors into whether you’re a complainer or a go-along, get along type. The states with the most complainers include Alaska, New Mexico, and Missouri. The three states experienced the greatest year-to-year complaint volume increases over a similar period last year.
Heading in the opposite direction was Maine, Rhode Island and Idaho, the states that experienced the greatest percentage decrease in complaints. Stoic New Englanders and rugged potato farmers apparently aren’t that easily enraged.
What are most people complaining about when they lodge a CFPB complaint? The majority of moans related to frauds or scams, with most of those attributed to debt settlement companies, which are institutions that take a fee and promise to reduce a burdensome debt. Consumers complained to CFPB that payments they made to debt settlement companies were never forwarded to their creditors, and as a result, they faced lawsuits for unpaid accounts.
THE “WORST” CARDS
The CFPB credit card rankings are a classic example that statistics can be manipulated to say whatever someone wants them to say. For example, take the list of “worst” cards. Here are 20 that are ranked by the lowest number of complaints to the CFPB to the highest:
- Bank of America
- JPMorgan Chase
- American Express
- U.S. Bancorp
- Capital One
- Wells Fargo
- Synchrony Financial
What that list doesn’t tell you is the relative percentages of complaints to the total number of card holders. While Citibank ranks lower on the list than Discover (making it a “worse” card for the purposes of the list), it has issued a heck of a lot more cards. Thus, it stands to reason that Citibank would generate more complaints just by dint of the sheer volume of its customers.
The same holds true for others. Even Barclays, which ranks at the bottom of the list, making it presumably the worst of the worst, has an equivalent complaint rate of just 1 in 20,000 cardholders. That’s not so bad in perspective.
The bottom line on credit cards: most companies will service you well. That’s not to say the occasional problem won’t occur. But certainly the large number of complaints mask a larger truth – the percentage of disgruntled customers is actually rather small when compared to the total number of cardholders. So no matter whether you choose the so-called best card by volume of complaints or the worse, you’ll likely be all right with your selection.
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