This March, I told you about the Consumer Financial Protection Bureau’s decision to finally publish the most important part of any consumer banking complaint: the story of what happened! Last week, the Bureau began sharing these stories online, allowing customers hunting around for a new bank to make better choices before they sign on the dotted line.
The Consumer Financial Protection Bureau — or CFPB for short — allows consumers to file complaints about their financial institution if something goes wrong. The CFPB will contact the company and try and help you find a resolution. Since March, consumers have also had the option of making the story of what happened to them public.
Consumer groups lauded the news: Americans for Financial Reform called it a “breakthrough” that’ll empower consumers “to avoid dangers and pitfalls,” and Ed Mierzwinski of U.S. PIRG said it will allow companies “to avoid practices that get other firms in trouble.” And Consumer Action created a helpful walkthrough — complete with pictures — showing how consumers can navigate the complaints.
So far, the CFPB has published 7,700 consumer stories, with more to come. The data is all public, and scrubbed of any personally-identifying information.
While transparency into the story behind a customer’s complaint is new, the CFPB has been using complaint data to help obtain refunds for consumers since 2011. As of March 2015, the Bureau has secured a total of $5.3 billion in relief to 15 million customers who fell prey to illegal behavior by financial companies. Looking at just a sampling of the complaint narratives submitted after March, it’s clear the CFPB’s work is far from over; It seems many customers are still getting bilked:
- A customer detailed being charged a $25 late fee even though they paid their bill on time.
- Another complained they were repeatedly denied a loan modification by JPMorgan Chase, and were “laughed at” when they requested one in person at a bank branch.
- One consumer detailed how Wells Fargo re-ordered how their checks were processed in order to maximize overdraft fees. Wells Fargo declined to provide a public response to the complaint, but you can see from the complaint that the customer got money back.
- Another described being charged Overdraft Protection fees despite having money in their savings account.
The overdraft fee complaints are particularly troublesome since, under federal law, banks aren’t allow to automatically enroll customers in overdraft protection — customers must opt-in. Instead, a 2014 report from the Pew Charitable Trusts found that 54% of customers charged overdraft fees don’t recall opting in to coverage. And banks have a big incentive to skirt the new rules: consumers paid — and banks pocketed — $31.9 billion in overdraft fees in 2013.
- One customer wrote about PayPal blocking access to their account balance for over 180 days.
- Another complaint said PayPal opened up a line of credit for them without their knowledge or consent, and then told them this unwanted line of credit had a negative balance.
This consumer is not alone in their experience: In May, the CFPB sued PayPal for illegally signing up customers for unwanted credit, fined the company $10 million, and demanded they refund $15 million to customers.
- A customer who had auto-pay set up describes being charged a late fee when their auto-pay failed due to a problem on Bank of America’s end.
- In one particularly depressing complaint, a mortgage customer reports that they asked for a loan modification and sent in the necessary forms. Bank of America claimed “every other week” that they were still missing documents. The customer re-supplied the documents “over and over” while staying in constant contact. Eventually, Bank of America said “the forms are over 90 days old,” so the customer had to re-supply then. After nine months of back and forth, the customer had their monthly payment raised by $300 a month.
This last story is disturbingly similar to allegations made by Bank of America whistleblowers in a 2013 lawsuit. These employees allege that they were “told to lie” to customers, to slow-walk loan modification requests, only to ultimately deny their request.
I’ve covered just a small sampling of the 7,700 stories. For more, you can explore the data yourself. Want to zoom in just on banking complaints? Check out Citibank, Wells Fargo, JPMorgan, Bank of America, or PayPal complaints — or, take a look at all banking complaints here. And for you techies out there: the complaints are also accessible via an API. Find something interesting in the consumer complaints? Write a response below and let me know!
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