CFPB Office of Servicemember Affairs Annual Report Highlights Consumer Complaints From Military Families

On June 13, 2022, the Consumer Financial Protection Bureau (CFPB) issued the Office of Servicemember Affairs Annual Report for 2021.  The report focuses primarily on customer complaints, highlighting issues related to credit reporting, debt collection, and medical billing. 

According to the CFPB, it received more than 42,700 customer complaints from servicemembers in 2021, a 5% increase from 2020 and up 19% from 2019.  Servicemembers have submitted more than 250,000 complaints to the CFPB since 2011.  Complaints regarding credit or consumer reporting represented 41% of the complaints, followed by debt collection at 21%.  Mortgage (10%), credit card (8%) and deposit accounts (8%) rounded out the top five categories of complaints.  While the overall volume has increased, the categories and percentages of complaints received by the CFPB have been generally consistent by issue and/or financial product over the past several years.

While the servicemember complaints about credit reporting resembled civilian complaints on the subject, the CFPB report notes the higher stakes to servicemembers, including possible risk to their security clearance on the basis of credit issues.  The report concludes that nationwide consumer reporting companies were not responsive to servicemember requests to resolve credit reporting issues.

The report identified medical billing problems as a driver for credit report and debt collection complaints, and the CFPB has said it will use its authorities to address concerns raised in the report.  Recommendations in the report include:

• A call for more robust data about the scope and impact of medical debt on servicemembers.

• To better serve servicemembers (including reservists and National Guard), veterans, and families, medical providers, and third-party billing companies should implement adequate systems to interface with TRICARE, the military health insurance program.

• Use of CFPB authority to ensure consumer reporting companies are adequately responding to servicemember complaints.

• Encouraging consumer reporting companies and medical providers to consider emulating recent changes to reporting practices made by the Department of Veterans Affairs, including exhausting all collection efforts and reviewing ability to repay before reporting a medical debt as unpaid and delaying the inclusion of servicembers’ debt on consumer credit reports for a period of time to allow them an opportunity to address it.

While the report also highlighted recent changes to reporting practices made by the VA and changes to the credit reporting of medical debt by Equifax, Experian, and TransUnion, it was otherwise singularly focused on complaint data and related recommendations.  Past reports have more broadly highlighted CFPB priorities, including military education, particular products (such as auto lending), coordination with other agencies, and military consumer research.