Yesterday I addressed the credit card, consumer loan, mortgage loan complaints consumer made to the Consumer Financial Protection Bureau (CFPB). In this part 2, I’ll address student loan, bank account and service complaints and handling of the complaints.
Student Loan Complaints
There were 2,000 student loan complaints. The breakdown was as follows:
Repaying your loan represented a majority of the complaints or 65 percent. This category included fees, billing, deferment, forbearance, fraud, and credit reporting.
Problems when they are unable to pay was 28 percent of the complaints. This category included default, debt collection, and bankruptcy.
Getting a loan was 4 percent of the complaints. This category included confusing terms, rates, and denial; confusing advertising or marketing, sales tactics or pressure, and financial aid services, recruiting.
Other represented 3 percent of the disputes.
Repaying the loan was the top complaint. Many students are not able to find employment before the deferment period of six months after graduation ends and are unable to repay the loan. Student loans are not forgiven, even in a bankruptcy.
Consumer loan complaints
There were 1,500 consumer loan complaints. This included installment loans, vehicle loans & leases, personal lines of credit. The breakdown was as follows:
Managing the loan, lease, or line of credit was 48 percent of the complaints. This included billing, late fees, damage or loss, insurance (GAP, credit, etc.), credit reporting, and privacy.
Problems when are unable to pay was 21 percent of the complaints. This included debt collection, repossession, set-off from bank account, deficiency, bankruptcy, and default.
Taking out the loan or lease, account terms and changes was 17 percent of the complaints. This category included term changes (mid-deal changes, changes after closing, rates, fees, etc.), required add-on products, trade-in payoff, and fraud.
Shopping for a loan, lease, or line of credit was 8 percent of the complaints. This category included sales tactics or pressure, credit denial, confusing advertising or marketing.
Other represented 6 percent of the complaints.
Company Response to Complaints
A majority of the complaints (81 percent) or 44,600 received from July 21, 2011 and June 30, 2012 were sent to companies for review and to respond. These companies responded to 90 percent or 40,300 of the complaints and closed 85 percent of them. The breakdown of the handling was as follows:
Companies reported that 55 percent of the complaints were closed and gave an explanation.
Companies reported that 26 percent were closed with monetary relief.
Companies were reviewing 13 percent of the complaints.
Companies reported 3 percent were closed with non-monetary relief.
Companies reported that 1 percent were closed without relief or explanation.
The median relief amount averaged $144 but varied by product. Credit card relief averaged $130, mortgage relief averaged $411, bank account and service relief averaged $105, student loan relief averaged $1,597 and consumer loan relief averaged $136.
After the company responds, the Consumer Financial Protection Bureau sends the company’s response to the consumer. Consumers can dispute any comment with a “closed” notation on it. For example, “closed with non-monetary relief” can be disputed. The consumer must contact the Consumer Financial Protection Bureau within 30 days to dispute the company’s response. Approximately 44 percent did not dispute the company’s response, 17 percent disputed it and the remaining 39 percent did not respond.
Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.