Loan management, problems breed complaints, CFPB says
June 29, 2016 -- Consumers continue to complain about issues managing their loans and problems they encounter when they are unable to pay off the loans, according to the latest Consumer Complaint Snapshot published by the CFPB this week.
The bureau based its report on the 38,500 complaints in the consumer loan category it says it has received since it began accepting consumer complaints in July 2011. The “consumer loan” category in the CFPB’s consumer complaint database includes complaints about vehicle loans and leases, installment loans, pawn loans, title loans, and personal lines of credit.
Among the key findings in the Snapshot:
- Complaints about vehicle loans made up the majority (52%) of the complaints about consumer loans; instalment-loan complaints came in second (31%)
- Two in every five complaints (43%) emanated from consumers struggling to manage their loan, lease, or line of credit, and about payment processing issues on loans -- such as not having payments applied to their accounts in a timely or proper manner.
- A lack of clear explanations of how fees and high interest rates would affect the total cost of consumers’ loans was also a focus of complaints, including that consumers said they did not understand why their account balances did not decrease after making a large number of monthly payments.
- Repossessions without notification were a frequent complaint too – including that the repossession occurred while the consumer believed a resolution agreement was in place.
Overall, the CFPB reported, it has handled more than 900,000 complaints nationally as of June 1, with debt collection the leader in complaints. Credit reporting and mortgages, respectively, were the next highest in complaints. Meanwhile, student loans complaints showed the greatest increase in complaints over the period of March to May, CFPB reported, with a 61% increase.