The Latest Trends from the CFPB Complaint Database

In this week's newsletter, we're going to dig into the CFPB Complaint Database and take a look at some of the trends in what fintech, banking, payments, and financial services consumers in the US are unhappy about.

• The number of total complaints in June 2024 (195,773) represented a dip in complaints for the first time since October 2023 after hitting their peak (209,822) in May.
• 2024 has seen the largest YOY increase in complaints since the CFPB began tracking consumer complaints; just from June of last year there was an 87% jump. Between June 2022 - 2023, the jump was 69%, and between June 2021 - 2022 the jump was 35%.
• The overwhelming majority of complaints are hyper-focused on one area - credit reporting, with 87% of complaints focused on that topic.
• For all the talk about folks in red states presumably wanting less government not more, the highest share of complaints for the month came from Florida (15%) and Texas (14%) consumers.
• Aside from the credit reporting and credit reporting related products, the highest sub-product of complaints was actually "I don't know" at about 2%, which is pretty alarming in my opinion as it suggests from the jump that the customer is not truly aware of what the product is or does.
• In terms of the actual issues, it's hard to get a full grasp on what is actually happening with all of these complaints since they are so wide and varied, and not every consumer elects to share a narrative. However, beyond credit reporting and debt collection, the two biggest irritants for consumers, the top 5 complaint areas were focused on 1) company investigations into existing complaints (by far and away the largest volume of non-credit related issues), 2) account management, 3) purchases, 4) fraud, and 5) payment processing.
• The specific companies with the most complaints are unsurprising. You have all 3 of the major bureaus at the top of the list, followed by Capital One, Chase, Wells Fargo, Citi and BOA in that order. However, there are some names that may be less familiar after that which are also pretty high in terms of complaint volume for the month that bear some scrutiny. Here are a few of them that you may have never heard of, along with a description of what they are all about:

1) Resurgent Capital Services - Debt collection

2) Encore Capital Group - Debt buyer

3) CL Holdings - The Japanese parent of a debt buyer (Jefferson Capital Systems) that also is focused on marketing.

4) Bread Financial Holdings - A few years removed from being known as the less intriguing "Alliance Data Systems," they are focused on private label cards, loyalty programs, and direct marketing.

5) Portfolio Recovery Associates - Debt collection.

6) CBC Companies - The parent company for Innovis, which is sometimes referred to as the "4th credit bureau" after the big 3; recently merged with another company called FactualData.

7) CCS Financial Services - "Credit Collection Services". Pretty straightforward.

8) Self Financial - They are a company offering a credit builder product.

9) I.C. System, Inc. - Debt collection.

10) Transworld Systems Inc - Debt collection.

Of the above group, the CFPB has interestingly only really gone after three of the above, taking action against Portfolio Recovery Associates last year and against Encore and Transworld even further back, in 2015 and 2017. Beyond that, the rest of these companies appear to have mostly managed to operate scot-free from a regulatory action perspective, letting the bigger names seemingly draw all of the attention. Resurgent is an example of where state regulators have ganged up on them instead along with a host of consumer lawsuits, but outside of them the rest seem to operate in this mode where consumers complain a lot about them yet the regulators seem to either have nothing they can call out, or at the extreme may elect not to chase down these companies precisely because there's less notoriety.

We'll be talking about these latest trends coming out of the CFPB's reporting and more tomorrow at 5:30 PM EST as we meet with Harris Qureshi to talk about Synapse, what the regulatory environment could look like under a Trump presidency, the continued focus on AML, crypto, FedNow, credit reporting, open banking, and much more. If you want to join in the conversation and ask questions or share your perspective, register here to be a part of the live event!

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Hope to see you all tomorrow!