In July 2011, the Consumer Financial Protection Bureau (CFPB), a federal government agency, began collecting consumer complaints about credit cards. Since then, it has expanded to collecting complaints about mortgages, bank accounts, student loans, consumer loans, credit reporting, money transfers and debt collection. If you have a complaint about one of these financial services, here's how to determine whether it's worth submitting to the CFPB and, if so, how to do it.
Is Your Complaint Worth Submitting to the CFPB?
"Complaints to the CFPB should be for illegal acts directly affecting the consumer, systematic abuses, or an unclear complaint process or complaints not rectified within a reasonable time," says Braden Perry, a partner in the Kansas City-based law firm of Kennyhertz Perry, LLC, who has over 10 years of experience in financial services compliance, internal investigations, enforcement matters, and regulatory issues. "The CFPB should focus on these issues, and not address every consumer complaint lodged against a financial institution," he says. "It's an inefficient [process], as most complaints can be alleviated by the financial institution easily if taken seriously early on."
If you're having problems with a financial institution, your first step should be to contact the institution directly. Start with a simple email, online chat or phone call to customer service. If you're complaining by phone, you may find it helpful to write yourself a script so you don't forget anything important you want to say.
Give the company an opportunity to address your complaint. Achieving resolution is often a matter of contacting the right person. If your first email or call doesn't accomplish anything, several additional phone calls in which you ask to speak to a manager may eventually put you in touch with someone who has the authority and competence to resolve your complaint.
If those methods fail, consider filing your complaint with the CFPB.
T! he Importance of Submitting Complaints
The CFPB states that its purpose in collecting and managing consumers' complaints about financial services is to learn more about "business practices that may pose risks to consumers." In addition, the agency states, "Complaints help with our work to supervise companies, enforce federal consumer financial laws, and write better rules and regulations."
The more complaints the CFPB receives about the same issue or the same financial institution, the more likely a large problem exists that regulation might help resolve. The complaints that consumers submit to the CFPB become part of a public database that economists and other researchers can use to identify patterns and suggest improvements in the way financial institutions interact with consumers and in the way they are regulated. And you don't need to worry about confidentiality – the database doesn't contain any personally identifiable information.
Perry says CFPB regulators should address financial institutions that have systemic issues or predatory behavior. "Without appropriate safeguards, this behavior could affect many consumers and the financial institution should be taken to task," he says.
In its first two years of operation, the CFPB's consumer complaint system has received 176,700 complaints. Almost half of these were about mortgages. Another 21% were about credit cards, while 15% concerned banking services and 8% dealt with credit reporting. Student loans and consumers loans each made up another 3% of complaints. The CFPB reports that 95% of accused companies respond to complaints.
Submitting Your Complaint
If you've determined that submitting a complaint to the CFPB is necessary, it's easy to do so. Visit http://www.consumerfinance.gov/complaint/ and choose the category that your complaint applies to: bank account or service, credit card, credit reporting, debt collection, money transfer, mortgage, student loan, or vehicle or consumer lo! an.
The exact steps for submitting your complaint depend on the service you are complaining about, but here's an example. If your complaint is related to a credit card, on page 1 you'll be asked to submit a short description of the issue and choose the category to which your complaint applies from the drop-down box. It is optional to submit details such as how much money you lost, the date of your loss and whether you have taken action to resolve the issue, such as contacting the company directly or filing a legal action. On page 2, you will write a short paragraph describing what you think would be a fair resolution to the problem. Page 3 requires you to submit your full name, mailing address and email address. Page 4 asks for the name on your account, your credit card number and the name of the company you're complaining about. It also gives you the opportunity to attach any documents that support your complaint, such as proof of payment. On page 5, you review your information, certify that it is accurate and submit your complaint.
The CFPB will forward your complaint to the company you named and try to get them to respond. If the CFPB thinks another government agency is better equipped to handle your complaint, it will forward it to that agency. Next, the company will review your complaint and communicate with you about it if necessary. It will then report back to the CFPB on what its next steps will be. The CFPB will notify you about that response and let you tell the CFPB whether you're satisfied with the response after you review it. If not, you have 30 days to dispute the company's response. Throughout the process, you'll be able to check the status of your complaint by logging on to the CFPB's website or calling its toll-free number.
You can file a complaint on behalf of yourself or someone else (say, your elderly grandfather who is having trouble with his reverse mortgage). If you're not comfortable using the website, you can also submit a complaint by email, phone, fax or mail.
CFPB Consumer Response Contact Information
Toll Free Number: (855) 411-CFPB (2372)
Español: (855) 411-CFPB (2372)
TTY/TDD: (855) 729-CFPB (2372)
Fax Number: (855) 237-2392
Hours of Operation:
8 am-8 pm EST
Consumer Financial Protection Bureau
PO Box 4503
Iowa City, Iowa 52244
The Bottom Line
Not all complaints need to be submitted to the CFPB. "Most complaints can be handled through the financial institution and most are rectified or clarified by the financial institution," Perry says. But when the employees you interact with at your bank, credit card company, mortgage lender or other financial institution seem incapable of or unwilling to resolve your complaint, the CFPB's process may help you get a better result.