Complaint Data Trends and Limitations: Three Take-Aways From the CFPB's Annual Consumer Response Report

On March 29, 2019, the Consumer Financial Protection Bureau (CFPB or Bureau) published its 2018 Consumer Response Annual Report. According to the report, Consumer Response’s role is to “analyze[] consumer complaints, company responses, and consumer feedback to assess the accuracy, completeness, and timeliness of company responses so that the Bureau, other regulators, consumers, and the marketplace have relevant information about consumers’ challenges with financial products and services.”

Here are the three main take-aways from the report.

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1. Credit Reporting Complaints on the Rise, Debt Collection Complaints Decreasing

In 2018, the CFPB received 329,800 consumer complaints. In line with the Bureau’s Fall 2018 semi-annual report (published in February 2019), credit and consumer reporting complaints remain dominant, followed closely by debt collection complaints.

However, the most recent report shows that complaints for these two products are trending in opposite directions. In 2018, the Bureau received approximately 126,000 complaints about credit or consumer reporting, a 27% increase from 2017. On the other hand, debt collection complaints -- which accounted for 81,500 of 2018 complaints -- decreased by 3% from 2017.

2. Debt Collection is the Primary Complaint of Older Consumers

The 2018 report breaks down the complaints by product for certain vulnerable groups, such as servicemembers and older consumers. The breakdown of complaints by type for servicemembers largely followed that of non-servicemembers: credit or consumer reporting complaints were most prevalent, followed by debt collection complaints.

When complaints for older consumers were viewed in isolation, a different pattern emerged. For consumers aged 62 or older, debt collection received the most complaints (23%), followed by credit or consumer reporting (21%). Interestingly, complaints about mortgages made up a significant portion (19%) of 2018 complaints for older consumers -- compared to a much smaller percentage (9%) of overall 2018 complaints.

Editor’s Note: This, taken in tandem with the Bureau’s recent report about the rise in elder financial exploitation, might indicate a direction of focus for the CFPB. Since debt collection complaints make up the highest percentage of complaints for older consumers, debt collectors should revisit their policies and procedures to ensure they are able to detect and appropriately respond to signs of elder financial exploitation.

3. CFPB Recognizes Limitations in Complaint Data

The issue of generalized complaint data has long been discussed in the industry, and it seems the Bureau is taking note. The current report states that complaint data derived solely from exhaustive lists of selections (such as product, sub-product, issue, and sub-issue) places limitations on analysis without context or other data. As quoted in the report:

Given these and other considerations, the Bureau has not yet identified an approach to contextualize multiple products, services, and markets without imposing a significant burden on companies to provide data. Nevertheless, because context is important, throughout this section the Bureau references publicly available data and research, where available, that provides some market context. The Bureau also continues to welcome specific suggestions and best practices about how to publish information about complaints.

In her opening message in the report, CFPB Director Kathy Kraninger references two Requests for Information (RFI) issued in 2018 regarding (1) complaint reporting practices and (2) complaint and inquiry handling. Kraninger writes that the comments from the RFI “will inform how our complaint program will evolve and how we will serve and interact with the program’s various stakeholders, including consumers, companies, and other regulators.”

The above seems to illustrate Director Kraninger’s commitment to the message she has consistently stated since she took over leadership of the Bureau in 2018:

For America’s financial system to run successfully, consumers should be treated fairly, financial institutions that serve them should have a level playing field on which to compete, and the marketplace should innovate in ways that give consumers more choices and meet their needs.