Financial institutions that treated customers best — and worst — during the pandemic

Posted: 7 August 2020 4:48 pm
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Americans had the most trouble with credit reporting agencies and banks — but they were mostly happy with lenders.

The COVID-19 pandemic forced financial institutions around the country to close their doors, shift to virtual services and review their processes. In doing that, it also presented new and unique challenges, and customer complaints are on the rise as a result.

The US declared the coronavirus a national emergency on March 13th — which is when complaints started to spike.

Before the announcement, the Consumer Financial Protection Bureau (CFPB) received an average of 7,750 complaints per week between January and March. Afterwards, the number of complaints rose by 25% to an average of 9,698 per week until mid-June, according to consumer complaint data for the year to date released by the CFPB on July 16th.

The sectors hit hardest by the pandemic

Customers submitted the most complaints about prepaid cards, international money transfers and credit reporting during that timeframe.

Other sectors weathered the pandemic much better. Student loan complaints actually dropped by 24%, and payday loans by 5%. Debt collection complaints stayed the same.

The Coronavirus Aid, Relief and Economic Security (CARES) Act could explain this. Passed on March 27th, the CARES Act suspended payments on federal student loans and paid out stimulus checks, easing the financial burden on Americans with outstanding loans or debt.

But it also explains why some sectors suffered. For example, many credit agencies reported missed payments and loan defaults, which led to consumers complaining about their credit scores dropping. And many consumers said their banks placed a hold on their Economic Impact Payments if their account was overdrawn, which means they couldn’t access their stimulus funds.

Table 1. The products and services that fared the worst in the pandemic, ranked by % change

Product or serviceAverage number of complaints per week during COVID-19
(3/13/2020-6/13/2020)
The % change before and after the national emergency
1Prepaid card186105%
2Money transfer or service, virtual currency24143%
3Credit or consumer reporting5,47042%
4Credit card73817%
5Vehicle loan and lease17715%
6Title loan1313%
7Credit repair1913%
8Personal loan989%
9Checking or savings account5566%
10Mortgage5605%

Table 2. The products and services that fared the best during the pandemic, ranked by % change

Product or serviceAverage number of complaints per week during COVID-19
(3/13/2020-6/13/2020)
The % change before and after the national emergency
1Student loan126-24%
2Payday loan33-5%
3Debt collection1,4810%

Companies with the highest number of complaints in 2020

Let’s zoom out to look at 2020 as a whole. Credit reporting agencies received the most complaints, with Experian, TransUnion and Equifax taking the top three spots on the list of nearly 6,000 companies.

Consumers filed 31,616 complaints against Experian this year, a huge jump from 14,212 in 2019. TransUnion more than doubled its complaints, while Equifax experienced a 70.9% increase in complaints. Despite the sheer volume of complaints, it’s worth nothing that all three agencies got a perfect score in terms of timely responses.

Credit reporting agencies aside, major banks rounded out the top 10 list, including Capital one, JP Morgan Chase & Co., Citibank and Bank of America.

Table 3. The 25 companies with the most complaints in 2020

CompanyThe number of complaints in 2020 (3/17/20–8/3/20)The number of complaints in 2019
(3/17/19–8/3/19)
The % increase in complaints between 2019 & 2020The % of complaints that had a timely response
1Experian Information Solutions Inc.31,61614,212122.46%100%
2TransUnion31,19815,320103.64%100%
3Equifax27,19415,90970.93%100%
4Capital One3,6312,85827.05%100%
5J.P. Morgan Chase & Co3,4923,3544.11%100%
6Citibank3,2702,74519.13%100%
7Bank of America3,1413,0562.78%99.71%
8PNC Bank2,833605368.26%100%
9Wells Fargo2,7043,142-13.94%98.71%
10Synchrony Financial1,6241,894-14.26%100%
11American Express Company1,3241,09221.25%100%
12U.S. Bancorp1,28295733.96%100%
13Alliance Data Card Services1,0411,0390.19%99.9%
14Portfolio Recovery Associates99988812.5%100%
15PayPal93662250.48%99.57%
16Discover Bank9068289.42%100%
17Shellpoint Partners826365126.3%98.67%
18TD Bank80072410.5%100%
19Navient Solutions, LLC.7971,440-44.65%100%
20Barclays Bank67152328.3%100%
21Truist Financial Corporation667066,700%99.7%
22Ocwen Financial Corporation65253621.64%99.85%
23Santander Consumer USA Holdings Inc.63551224.02%100%
24United Services Automobile Association63153418.16%100%
25ERC62349725.35%100%

What consumers complained about the most in 2020

Of the 187,000 complaints submitted to the CFPB in 2020, 8,357 of those mentioned the coronavirus — indicating that customers are unsatisfied with the way financial institutions have handled the pandemic. Over 70,000 complaints related to incorrect credit reporting, and another 21,740 consumers said they had issues with how credit agencies investigated errors and other problems.

Beyond credit reporting, more than 10,000 customers had to deal with debt collectors for debt they didn’t owe, and nearly 6,000 had trouble managing their account.

The economic strain on consumers during COVID-19 shows up in the report, too, with 2,145 struggling to pay their mortgage and 1,430 complaining about high fees and interest charges. And 1,362 ended up taking or threatening to take legal action against their financial institutions.

Interestingly, some issues improved year-on-year. For example, fewer customers experienced problems with the payment process or getting a credit card. And only 1,224 customers complained about the way their financial institutions communicated with them, a 38.8% drop from 2019 — which speaks to how banks, credit unions and loan services pivoted their communication strategies during the pandemic.

To put these numbers into context, the CFPB has supervisory authority over banks and credit unions with assets over $10 billion, and mortgage, payday and private student loan lenders of all sizes. It also polices other consumer financial markets, including debt collectors, international money transfer services and credit reporting agencies.

Table 4. The top 25 issues consumers faced in 2020

IssueThe number of 2020 complaints
(3/17/20–8/3/20)
The number of 2019 complaints
(3/17/19–8/3/19)
The % increase in complaints between 2019 & 2020
1Incorrect information on your report71,49534,701106.03%
2Problem with a credit reporting company’s investigation into an existing problem21,74012,83169.43%
3Attempts to collect debt not owed10,5339,04016.52%
4Managing an account5,8945,4538.09%
5Improper use of your report5,3954,9858.22%
6Written notification about debt4,0233,7198.17%
7Trouble during payment process3,9664,535-12.55%
8Problem with a purchase shown on your statement3,3632,47236.04%
9Struggling to pay mortgage2,1452,599-17.47%
10False statements or representation1,6961,5489.56%
11Fees or interest1,4301,19519.67%
12Applying for a mortgage or refinancing an existing mortgage1,41491654.37%
13Unable to get your credit report or credit score1,4021,3206.21%
14Took or threatened to take negative or legal action1,3621,768-22.96%
15Other features, terms or problems1,2781,2373.31%
16Communication tactics1,2242,000-38.8%
17Problem with fraud alerts or security freezes1,2051,02817.22%
18Closing an account1,17297020.82%
19Problem when making payments1,1341,147-1.13%
20Dealing with your lender or servicer1,0781,959-44.97%
21Fraud or scam96584414.34%
22Closing your account89173521.22%
23Problem getting a card or closing an account837123580.49%
24Getting a credit card8321,009-17.54%
25Opening an account8157774.89%

Photo: CFPB

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