Consumer finance complaints are up significantly over the past four months, as pandemic hype took hold and Americans struggled to adjust to new financial realities.
That’s the general takeaway from a new report from LendEDU. In it, the online lending platform reports particular consumer frustration with credit reporting and repair services, and with the U.S. government’s handling of the financial side of the COVID-19 crisis.
This from the study:
- Between 3/13/20 and 7/17/20, 140,042 consumer complaints were filed with the U.S. Consumer Financial Protection Bureau (CFPB), which is a 44% year-over-year increase from the 97,008 that were filed over the same time last year.
- The 140,042 complaints filed during this 127-day period is also a 38% increase compared to the previous 127-day period ending on 3/12/20.
- Year-over-year, there was an 84% increase in the number of complaints related to "credit reporting, credit repair services, or other personal consumer reports," a 77% increase in the number of complaints related to "money transfer, virtual currency, or money service," a 29% increase in the number of complaints related to "credit card or prepaid card," and a 41% decrease in the number of complaints related to "student loan."
- More specifically, there was a 506% year-over-year increase in the number of complaints related to a "government benefit card." Even more specific than that, there was a whopping 1,790% increase in the number of complaints related to "problem getting a card or closing an account" when it came to those government benefit cards.
- There was a 109% year-over-year increase in credit reporting complaints related to "incorrect information on your report."
LendEDU digs down deep to crack some of the data code.
For instance, the extreme rise in complaints related to a government benefit card is likely due to the troubled rollout of debit cards as part of the CARES Act $1,200 stimulus payments, the company notes.
Additionally, the huge increase in credit reporting complaints can likely be traced back to financial institutions agreeing to reduced payments or deferment periods with consumers during the pandemic. That said, not confirming these modified payment plans with the credit bureaus, while the big drop in student loan complaints is likely due to the pandemic forbearance that all federal borrowers were placed in until October 2020.
Obviously, there are many moving parts in play when hundreds of millions of Americans balance their fears of a pandemic with the realities of running their household finances at the same time.
What the LendEDU study tells us that the Great American Financial Consumer doesn’t think he or she is getting much help from private and public enterprise during the COVID crisis – just when they need it most.