Three years after it opened for business, on July 21, 2014, the
Consumer Financial Protection Bureau (CFPB) announced it was
accepting complaints from consumers with problems with (1) prepaid
cards; (2) debt settlement services; (3) credit repair services;
and (4) pawn and title loans. This signals that the CFPB will
now be subjecting companies in these markets to heightened
scrutiny.
Background
The CFPB started taking complaints about credit cards when it
opened its doors in July 2011. It also solicits complaints
about mortgages, bank accounts and services, private student loans,
auto and other consumer loans, credit reporting, debt collection,
payday loans, and money transfers. To date, the CFPB has
received 400,000 complaints from consumers.
Complaint Process
The CFPB expects companies to respond to complaints within 15 days
and describe the steps they have taken or plan to take. The CFPB
expects companies to close all but the most complicated complaints
within 60 days. Consumers are given a tracking number after
submitting a complaint and can check the status of their complaint
by logging on to the CFPB website.
Prepaid Cards
Prepaid cards, which include gift cards, benefit cards, and general
purpose reloadable cards (GPRCs), generally allow a consumer to
access money that has been paid and loaded onto the card upfront.
The CFPB and consumer groups believe that some prepaid cards
have fewer consumer protections than debit or credit cards.
As a result, the CFPB indicates it will issue a proposed rule aimed
at increasing federal consumer protections for general purpose
reloadable prepaid cards.
Complaint categories include:
- Problems managing, opening, or closing an account
- Overdraft issues and incorrect or unexpected fees
- Frauds, scams, or unauthorized transactions
- Advertising, disclosures, and marketing practices
- Adding money and savings or rewards features
Debt Settlement and Credit Repair
Services
While debt settlement services fall under the jurisdiction of the
CFPB, credit repair services don't clearly do so.
Nonetheless, they are now included in the portal.
Complaint categories include:
- Excessive or unexpected fees
- Advertising, disclosures, and marketing practices
- Customer service issues
- Frauds or scams
Pawn and Title Loans
According to the CFPB, pawn stores and title loan companies often
provide small loans to consumers using personal property or a
vehicle title as collateral that are frequently short-term and may
have high interest rates.
Complaint categories include:
- Unexpected charges or interest fees
- Loan application issues
- Problems with the lender correctly charging and crediting payments
- Issues with the lender repossessing, selling, or damaging the consumer's property or vehicle
- Unable to contact lender
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The consumer complaint portal is an
integral part of the CFPB's data gathering process and used to
inform decisions about regulatory, supervision and examination, and
enforcement priorities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.