Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Banking newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (March 24, 2021, 9:21 PM EDT) -- Consumers struggling to contend with the economic turbulence caused by the COVID-19 pandemic helped fuel a surge of complaints to the Consumer Financial Protection Bureau in 2020, the federal agency said Wednesday.
In its annual report to Congress, the agency said the number of complaints went up by nearly 54% in 2020 compared to the previous year.
Consumers filed about 542,300 reports of issues with financial products to the CFPB during the tumultuous year in which markets were upended, millions of Americans lost their jobs and more than 500,000 people in the U.S. were killed by the coronavirus, the agency said. By contrast, 352,400 Americans reached out in 2019.
In a statement, CFPB acting Director Dave Uejio characterized the pandemic as one of "the most disruptive long-term events we will see in our lifetimes."
"Not surprisingly, the shockwaves it sent across the planet were felt deeply in the consumer financial marketplace," Uejio said.
More than 58% percent of the complaints from the past year concerned credit and consumer reports, the CFPB said, noting that complaints in that category were up since 2019.
On a monthly basis in 2020, there were 23,400 complaints about credit and consumer reporting, compared to a monthly average of about 11,400 complaints in 2019, the agency said. It also found that while the number of such complaints was increasing before the pandemic, they seemed to accelerate around the time COVID-19 slammed the nation.
In that top complaint category, the regulator added, many of the requests concerned the major credit reporting agencies: Equifax, Experian and TransUnion. But the CFPB said that while those agencies "typically provided substantive and comparatively detailed responses to the majority of complaints in prior years," they had stopped offering complete and accurate responses amid the pandemic. The CFPB noted that it is planning to put out another report later this year about credit rating agencies that will focus on incomplete or inaccurate information on consumer credit reports, including identity theft-related issues.
Following credit and consumer reporting complaints were those related to debt collection, which comprised 15% of the total received. Complaints about credit cards made up 7% of the total, those about checking or savings accounts represented 6% and complaints about mortgages comprised 5%, according to the CFPB.
Geographically, Florida led the nation in consumer complaints, with 309 complaints per 100,000 people. Washington, D.C., and Georgia trailed close behind with the second- and third-highest rate of complaints nationwide. South Dakota had the fewest complaints, with only 39 for every 100,000 residents.
Roughly 32,100 of the complaints the agency received in 2020 mentioned the pandemic, which the CFPB said averages out to more than 3,000 complaints a month beginning in April.
--Editing by Steven Edelstone.
For a reprint of this article, please contact reprints@law360.com.
