Credit Cards, Consumer Complaints the CFPB’S Consumer Complaint Database Gets Real Results for Credit Card Holders

Credit Cards, Consumer Complaints The CFPB’s Consumer Complaint Database Gets Real Results for Credit Card Holders

PIRGIM Education Fund

Miles Unterreiner and Tony Dutzik, Frontier Group Ed Mierzwinski and Laura Murray, U.S. PIRG Education Fund January 2014 Acknowledgments

PIRGIM Education Fund and Frontier Group sincerely thank Sarah Wolff of the Center for Responsible Lending and Ruth Susswein of Consumer Action for their review of drafts of this document, as well as for their insights and suggestions. The authors sincerely thank Ben- jamin Davis for his editorial assistance, Spencer Alt for his research assistance and Ashleigh Giliberto of U.S. PIRG Education Fund for her assistance with Appendix B of this report. PIRGIM Education Fund and Frontier Group thank The Ford Foundation for making this report possible. The authors bear responsibility for any factual errors. The recommendations are those of PIRGIM Education Fund. The views expressed in this report are those of the authors and do not necessarily reflect the views of our funders or those who provided review. 2014 PIRGIM Education Fund. Some Rights Reserved. This work is licensed under a Creative Commons Attribution Non-Commercial No Derivatives 3.0 Unported License. To view the terms of this license, visit creativecommons.org/licenses/by-nc-nd/3.0. With public debate around important issues often dominated by special interests pursuing their own narrow agendas, PIRGIM Education Fund offers an independent voice that works on behalf of the public interest. PIRGIM Education Fund works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer citizens meaningful opportunities for civic participation. For more information, please visit our website at www.pirgimedfund.org. Frontier Group conducts independent research and policy analysis to support a cleaner, healthier and more democratic society. Our mission is to inject accurate information and compelling ideas into public policy debates at the local, state and federal levels. For more information about Frontier Group, please visit www.frontiergroup.org. Cover image: Marie C Fields/Shutterstock Design: Alec Meltzer/meltzerdesign.net Table of Contents

Executive Summary 1 Introduction 7 The Consumer Financial Protection Bureau: A Watchdog for Consumers 9 The Consumer Complaint Database: A Critical Part of the CFPB’s Mission 10 How the Consumer Complaint Process Works 10 The Consumer Complaint Database 11 Consumer Complaints about Credit Cards 13 Complaints by Issue 13 Complaints by Company 13 Disputed Responses 19 Complaints by State 21 Trends in Complaints over Time 22 Conclusions and Recommendations 24 Methodology 27 The Consumer Complaint Database 27 Normalizing Complaints by State Population 27 Appendix A: Detailed Data Tables for Complaints Regarding Credit Cards 28 Appendix B: Searchable Public Databases of Complaints to Government Agencies 34 Endnotes 37

Executive Summary

he Consumer Financial Protection Despite the benefits to consum- Bureau (CFPB) was established in ers brought by enactment of the Credit T2010 in the wake of the worst finan- Card Accountability Responsibility and cial crisis in decades. Its mission is to iden- Disclosure (Credit CARD) Act of 2009, tify dangerous and unfair financial prac- consumer complaints about credit cards tices, to educate consumers about these remain common. Between November practices, and to regulate the financial in- 2011—when the Consumer Financial stitutions that perpetuate them. Protection Bureau began recording To help accomplish these goals, the data on credit cards—and September CFPB has created and made available to 10th, 2013, the CFPB recorded more the public the Consumer Complaint Da- than 25,000 complaints about credit tabase. The database tracks complaints cards. made by consumers to the CFPB and how they are resolved. The Consumer • Capital One was the most com- Complaint Database enables the CFPB to plained-about credit card issuer by to- identify financial practices that threaten to tal number of complaints, followed by harm consumers and enables the public to Citibank, Bank of America and JPM- evaluate both the performance of the fi- organ Chase. nancial industry and of the CFPB. This is the fourth in a series of reports • GE Capital Retail was the most com- that review complaints to the CFPB na- plained-about credit card company tionally and on a state-by-state level. In among the top 10 card issuers based this report we explore consumer com- on the ratio of complaints to card plaints about credit cards with the aim of purchase volume. GE Capital Retail uncovering patterns in the problems con- experienced 88 complaints per billion sumers are experiencing with their credit dollars in purchase volume, followed cards and documenting the role of the by Capital One with 46 complaints CFPB in helping consumers successfully and Barclays with 25 complaints per resolve their complaints. billion dollars in purchase volume.

Executive Summary 1 • Ten U.S. credit card companies ac- plained-about credit card company counted for about 93 percent of all in 43 states, while Citibank was the consumer complaints to the CFPB. most complained-about company in (See Figure ES-1.) six states and the District of Colum- bia. Bank of America was the most Consumers face a wide array of complained-about company in Alaska. problems with their credit cards. The (See Figure ES-3.) most common problem faced by consumers was billing disputes, followed by diffi- • Residents of Northeastern states are culties with annual percentage rates (APR) most likely to complain about their or interest rates, and trouble with identity credit cards, while consumers in the theft, fraud or embezzlement. Thousands Midwest and South are least likely. of consumers also complained about prob- The District of Columbia had the lems with closing or canceling accounts, most complaints per capita, followed late fees and collection practices. by Delaware, Maryland, New York, New Jersey, Florida, Connecticut, Complaints about companies vary Massachusetts, Virginia and Maine. by state, and state residents vary in their tendency to reach out to the CFPB. The CFPB is making a significant difference for consumers facing diffi- • Capital One was the most com- culty with their credit card companies.

Figure ES-1. Ten Companies Accounted for About 93 Percent of Complaints to the CFPB about Credit Cards

2 Credit Cards, Consumer Complaints Figure ES-2. Billing Disputes Are the Most Frequent Source of Complaints to the CFPB about Credit Cards

Figure ES-3. Capital One Is the Most Complained-about Credit Card Company in 43 States

Executive Summary 3 Figure ES-4. Complaints about Credit Cards Vary by State

• The CFPB has helped more than every five complaints concerning GE 7,300 consumers—about three in 10 Capital Retail resulted in monetary complainants—to receive monetary relief to the consumer, while only compensation as a result of their about 20 percent of complaints con- credit card complaints. (See Figure cerning American Express did. ES-5.) The median amount of monetary relief for consumers with credit • About 20 percent of responses from card complaints through mid-2013 credit card companies were deemed was $128. More than 2,000 additional unsatisfactory by consumers and were consumers have had their complaints subjected to further dispute. closed with some form of non-monetary relief, which includes actions such • Of the 10 companies with the most as altering account terms or fixing an overall complaints, the company with incorrect submission of information the highest number of disputed re- to a credit bureau. sponses was Capital One, with 1,044, followed by Citibank and Bank of • Credit card companies vary greatly America. (See Table ES-1.) These in the degree to which they respond three credit card companies were also to consumer complaints with offers the three companies with the highest of monetary relief. Nearly two out of number of overall complaints.

4 Credit Cards, Consumer Complaints Figure ES-5. Nearly 40 Percent of Credit Card Customers Received Monetary or Non- Monetary Relief After Complaining to the CFPB

Table ES-1. Companies Vary in the Degree to which Consumers Dispute their Responses to CFPB Complaints

Percentage of Rank Company Disputed Complaints Complaints Disputed 1 Capital One 1,044 20% 2 Citibank 954 21% 3 Bank of America 712 21% 4 JPMorgan Chase 634 20% 5 Amex 426 26% 6 GE Capital Retail 283 14% 7 Discover 213 18% 8 Wells Fargo 208 20% 9 Barclays 158 21% 10 U.S. Bancorp 129 23%

Executive Summary 5 • Of the 10 companies with the most • Provide regular trend analyses and overall complaints, the company monthly detailed reports on com- with the greatest proportion of dis- plaint resolutions and disputes. puted responses was American Ex- press (Amex), with just over a quarter • Simplify the interfaces that allow users of responses disputed. Of these same to summarize complaint database re- companies, GE Capital Retail had ports in graphical and printable formats. the lowest proportion of disputed responses, at 14 percent. • Publicize information about the CFPB complaints process in forums that are The Consumer Financial Protec- likely to be seen by credit card users. tion Bureau’s Consumer Complaint The agency should develop more out- Database is a key resource for consum- reach mechanisms for consumer educa- er protection. To enhance the ability tion about the database and its services of the CFPB to respond to consumer for consumers, including through the complaints, the CFPB should: creation of educational materials to be distributed on- and off-line, through • Add more detailed information to the more events outside Washington, D.C., database, such as actual complaint and through non-profit organizations. narratives, detailed complaint categories and subcategories, complaint • Develop free applications (apps) for resolution details, consumer dispute consumers to download to smart- details, and data regarding member- phones to access information about ship in classes protected from dis- how to complain about a firm and how crimination by law. Expansion of to review complaints in the database. complaint-level details should include more information about amounts and • Expand the Consumer Complaint Da- types of monetary and non-monetary tabase to include discrete complaint relief. Software and other techniques categories for high-cost credit prod- should be used to protect consumer ucts such as auto title loans and pre- privacy by giving consumers the right paid cards. We commend the CFPB not to provide details and by taking for adding payday loan complaints to steps to prevent the release of per- the database in November 2013. sonally-identifiable information or the re-identification of consumers. It • Continue to use the information is critical that the Bureau achieve the gathered from the Consumer Com- disclosure of more individual complaint Database, from supervisory and plaint details while simultaneously examination findings, and from other making every reasonable effort to sources to require a high, uniform lev- protect personal data. el of consumer protection and ensure that responsible industry players can • Add features such as clear definitions better compete with those who are us- of terms and instructions. ing harmful practices.

6 Credit Cards, Consumer Complaints Introduction

redit cards are virtually ubiquitous At the time, Providian founder An- in modern America. We carry them drew Kahr, famous for his statement that Caround in our pockets, bring them to the “problem is [how] to squeeze out restaurants and baseball games, and rarely enough revenue and get customers to sit leave home without one. They help us go still for the squeeze,” advised the compa- on vacations, afford this month’s rent pay- ny not to tell customers that their credit ment, or go out for coffee before work. cards don’t have grace periods and to pro- Yet credit cards also pose serious mote “no-annual-fee” cards that in fact risks to consumers. The average indebted required consumers to pay annual credit American household carries card debt of protection fees of up to $96. He also sug- over $15,000.1 While that figure is exag- gested that a better way to market a credit gerated by a few extremely indebted indi- card’s 1-percent rebate program would be viduals, and median debt is lower, credit “just by randomly or systematically giving card debt remains a fact of life for many a few customers a big rebate” and then ad- Americans. And when faced with confus- vertising the rebate program as “up to 30 ing credit card agreements, identity theft percent.”3 and fraud, or seemingly arbitrary fees and In 2009, after these and other unfair charges on their bills, many consumers practices had been adopted by other play- don’t know where to turn. ers in the industry, Congress acted to pro- Credit card issuers have a long history tect consumers from many of the worst of using deceptive marketing tactics, ques- abuses by adopting the Credit Card Ac- tionable billing practices, and dubious fees countability Responsibility and Disclosure and charges to extract money from con- (Credit CARD) Act of 2009. The Credit sumers. Among the earliest companies CARD Act limited the ability of card is- held accountable for these strategies was suers to impose deceptive or abusive fees San Francisco-based Providian Finan- or penalty rates of 36 percent APR or cial Corporation, which between 2000 more for minor late payments, made it and 2002 paid over $400 million to settle more difficult for credit card companies charges of consumer deception.2 to ensnare young people and sub-prime

Introduction 7 borrowers in debt, and improved disclo- Today, in the form of the Consumer sure for borrowers. Since adoption of the Financial Protection Bureau (CFPB), Credit CARD Act, the total cost of credit consumers have that watchdog. Created to consumers has dropped by 2 percent in 2010, the CFPB has already made a and some of the worst industry practices big difference for consumers in many have been virtually eliminated.4 areas of consumer financial protection. However, consumers still face many The agency has cracked down on ille- challenges with their credit cards, includ- gal kickbacks from mortgage insurers to ing some newer practices that put them at mortgage companies.7 It has investigated risk. Recently, credit card companies have abusive “overdraft protection” policies begun offering so-called “debt protection” by banks that can result in consumers programs, which purport to protect the paying hundreds of dollars in fees for a consumer against credit card debt in the single overdraft. It has exposed the sale case of job loss, illness or other personal of inaccurate credit scores to consum- hardship. Unfortunately for consumers, as ers that differ from the scores used by Reuters reports, credit card issuers can find lenders to make credit decisions.8 And loopholes that allow them to avoid paying perhaps most importantly for credit card out debt protection money to consumers. holders, it has imposed nearly $800 mil- The Government Accountability Office lion in consumer restitution and civil (GAO) found that consumers receive just enforcement penalties for unfair prac- 21 cents in benefits for every dollar they tices by four large credit card companies, spend on debt protection programs—re- primarily for add-on protection schemes sulting in high profit margins for credit like those pioneered by Andrew Kahr and card companies and financial hardship for Providian in the early 2000s.9 cardholders.5 As criticism of such prod- In this, the fourth in a series of analy- ucts ballooned, and CFPB enforcement ses of the Consumer Complaint Database, intensified, Bank of America stopped sell- we focus on complaints regarding credit ing debt protection services in 2012, and cards. Roughly 1,200 consumers each JPMorgan Chase halted sales to new cus- month have complained to the CFPB tomers.6 about problems with their credit cards. These kinds of credit card practices By reviewing patterns of consumer com- underscore the need for a watchdog whose plaints, citizens can determine which com- sole purpose is to look out for the inter- panies in their region have been subject to ests of consumers in the financial market- the most complaints and which have been place, including the millions of Americans the most effective at resolving consumer who hold credit cards. Consumers need a complaints. watchdog with the power to investigate The consumer complaints reviewed in new credit card schemes, work on con- this report indicate that America is a long sumers’ behalf in disputes with financial way from having a financial marketplace services firms, and stop the most egre- that serves consumers. America needs a gious anti-consumer practices. strong CFPB.

8 Credit Cards, Consumer Complaints The Consumer Financial Protection Bureau: A Watchdog for Consumers

he U.S. financial crisis of 2008 was Frank Wall Street Reform and Con- the product of an under-regulated sumer Protection Act, which created the Tfinancial system run amok. Millions Consumer Financial Protection Bureau of consumers were lured into mortgages (CFPB), whose mission is to “make mar- whose terms they could not understand kets for consumer financial products and and which they had little hope of ever be- services work for Americans—whether ing able to repay. Easy credit inflated the they are applying for a mortgage, choosing housing bubble which, when it collapsed, among credit cards, or using any number brought down the fortunes of millions of of other consumer financial products.”10 families as well as the broader economy. The bureau started work on July 21, 2011. The mortgage crisis highlighted the The CFPB is a critical asset for con- need for more stringent financial regula- sumers: educating the public about finan- tions and better consumer education. But cial practices, enforcing consumer protec- the problem extended far beyond mortgag- tion laws, and analyzing available data to es. For decades, consumers had increasing- keep track of current trends in the con- ly fallen prey to a growing list of predatory sumer marketplace.11 To fulfill these roles, financial practices, from payday loans to the CFPB maintains a strong connection exorbitant credit card and bank fees—with with the public it serves—including by re- little help from Washington, D.C. ceiving and acting upon consumer com- In 2010, Congress passed the Dodd- plaints about financial institutions.

The Consumer Financial Protection Bureau: A Watchdog for Consumers 9 The Consumer Complaint • Identify trends in issues and potential unfair practices: The CFPB can Database: A Critical Part use the complaint data in aggregate of the CFPB’s Mission to identify common issues or sectors The CFPB engages in many tasks as part where more enforcement is needed. of its mission to protect consumers. Ac- cording to the agency’s website, the CFPB: • Hold financial services firms accountable: Making complaint data • Writes rules, supervises companies, available to the public increases the and enforces federal consumer finan- accountability of financial institu- cial protection laws; tions. Ideally, these institutions will be less likely to engage in unfair prac- • Restricts unfair, deceptive or abusive tices out of the fear that they will be acts or practices; held accountable by the public for any resulting increase in complaints. The • Takes consumer complaints; complaint data also alert the agency about potential enforcement actions • Promotes financial education; that may need to be taken.

• Researches consumer behavior;

• Monitors financial markets for new risks to consumers; and How the Consumer Complaint Process Works • Enforces laws that outlaw discrimi- When a consumer believes that he or she nation and other unfair treatment in 12 has been subject to an unfair financial consumer finance. practice, he or she may file a complaint with the CFPB. Filing a complaint trig- Collecting and responding to con- gers a process through which the CFPB sumer complaints is a key part of the passes the complaint along to the relevant CFPB’s mission, one that contributes to financial institution, and later follows up achieving several of the above goals. In with the consumer to ensure the response particular, consumer complaints enable was adequate. the CFPB to: The steps are as follows:14

• Learn about new threats to con- • Filing—The consumer submits a com- sumers: The complaint process is de- plaint form via the CFPB’s consumer signed to engage consumers when they complaint website (www.consumerfi- believe that they have been wronged. nance.gov/complaint) or by phone (at The CFPB Office of Consumer Re- 855-411-2372), with telephone com- sponse “hears directly from consumers plaints accepted in many languages. about the challenges they face in the Consumers can track the progress marketplace, brings their concerns to of their complaints using a variety of the attention of companies, and assists tools, including e-mail updates. in addressing their complaints.”13

10 Credit Cards, Consumer Complaints • Review and routing—CFPB staff • Analysis and reporting—The CFPB review the complaint and, if appropri- aggregates data about consumer com- ate, send it to the relevant company plaints in its complaint database, ana- (or, if the issue is outside of the CF- lyzes those data for trends, and reports PB’s jurisdiction, to another govern- regularly to Congress and the public. ment agency).

• Company response—The company that is the subject of the complaint responds to the consumer and The Consumer the CFPB and proposes a resolution to the complaint. The consumer can Complaint Database Maintaining the Consumer Complaint then provide any response or feedback Database is a key part of the CFPB’s mis- to the company and the CFPB. sion. The database provides the agency, the media and consumers with the infor- • Investigation—CFPB staff review mation needed to monitor trends in con- many of the complaints, the companies’ sumer complaints and industry’s response responses, and the consumers’ feedback to those complaints. to prioritize any complaints for investi- The CFPB’s complaints program gation or enforcement action.

Figure 1. Screenshot of the CFPB’s Consumer Complaint Database

The Consumer Financial Protection Bureau: A Watchdog for Consumers 11 and the Consumer Complaint Database • Several data points associated with the have gradually expanded in scope over complaint’s resolution (including the the two years since the agency began col- steps taken to resolve the complaint lecting consumer complaints in July 2011. and whether the outcome was disput- Initially, the CFPB received complaints ed by the consumer). about credit cards, and has gradually added banks, student loans, credit reporting The Consumer Complaint Database and other financial services to the com- is updated nightly and includes a break- plaints program. In July 2013, the agency down of complaints by financial sector. began accepting complaints about debt The CFPB also publishes quarterly sum- collection practices.15 The agency has maries of patterns in consumer com- also gradually expanded the amount of plaints. data available to the public through the As of December 29, 2013, the CFPB database—in May 2013, for instance, the had published data on approximately CFPB enabled complaints to be identified 175,000 complaints.16 Of these com- by state. plaints, more than 29,000 were related to Complaints submitted to the CFPB credit cards. About half the complaints include information on a variety of topics, were related to mortgages, with student including: loans, credit reports, and consumer loans also attracting thousands of complaints • The specific issue or problem the con- each. sumer had with that financial service, This report is the fourth in a series of reports tracking trends in consumer • The company that provided the ser- complaints to the CFPB. Each report will vice, review a specific sector of the financial services industry. In this fourth report, • The date on which the complaint was we focus on a vital issue of importance to filed and state from which it was filed, many Americans: credit cards.

Figure 2. Overall Complaints Received by the CFPB by Issue17

12 Credit Cards, Consumer Complaints Consumer Complaints about Credit Cards

he Consumer Financial Protection Complaints by Company Bureau received responses to roughly The CFPB has authority to regulate and T25,000 complaints about credit cards investigate any institution that offers a between November 2011, when it began consumer financial product or service, recording credit card complaints, and including credit card companies.19 The September 10, 2013. The CFPB’s Con- CFPB database enables consumers to sumer Complaint Database provides a compare the number of complaints filed rich source of information about the types against credit card issuers—providing a of credit card services that most frequent- window into consumers’ level of overall ly cause problems for consumers, as well satisfaction with credit card services. as which companies in which states are the most frequent subjects of consumer Total Complaints dissatisfaction. Figure 4 (next page) ranks the 10 most complained-about companies by absolute number of complaints. The credit card issuer receiving the most complaints was Complaints by Issue Capital One, which received just over The CFPB accepts consumer complaints a fifth of all complaints filed with the regarding 33 categories of credit card is- CFPB. Citibank, Bank of America, JPM- sues. The issues receiving the highest organ Chase and GE Capital Retail—the number of consumer complaints were financial, banking, and credit card divi- billing disputes, APR or interest rates, and sion of multi-sector corporation General identity theft, fraud or embezzlement. Electric, which offers credit cards under Thousands of consumers also complained the brands of retail stores like Walmart about difficulty with closing or canceling and other businesses—rounded out the accounts, late fees and collection practices. top five for total number of complaints.20

Consumer Complaints about Credit Cards 13 Figure 3. Breakdown of Complaints by Issue18

When complaints are normalized by pur- As noted above, GE Capital Retail had chase volume for the largest card issuers, the most complaints per billion dollars of GE Capital Retail had the highest number purchase volume among the 10 most com- of complaints per billion dollars in pur- plained-about companies, followed by chase volume. (See Table 1.) Capital One. Amex—the company with The top 10 companies by overall number the highest overall purchase volume—is of complaints received about 93 percent of all the least complained-about company by consumer complaints filed with the CFPB. complaints-to-purchases ratio.21

Figure 4. Top Ten Companies by Total Number of Complaints

14 Credit Cards, Consumer Complaints Table 1. Top Ten Companies by Complaints per Billion Dollars in Purchase Volume22

Complaints per Purchase Volume Billion Dollars in Rank Company Complaints (Billions of Dollars) Purchase Volume 1 GE Capital Retail 2,087 $23.7 88.1 2 Capital One 5,265 $115.6 45.5 3 Barclays 762 $30.5 25.0 4 Citibank 4,514 $194.7 23.2 5 Wells Fargo 1,047 $56.2 18.6 6 Bank of America 3,320 $248.6 13.4 7 Discover 1,200 $100.1 12.0 8 JPMorgan Chase 3,176 $370.8 8.6 9 U.S. Bancorp 562 $82.5 6.8 10 Amex 1,643 $519.5 3.2

Responses to Complaints remaining complaints to the CFPB regard- The CFPB tracks how companies re- ing credit cards (60 percent) with an expla- spond to complaints by consumers, and nation to the consumer. whether consumers disputed the compa- Credit card companies vary greatly in nies’ responses. the degree to which they extend monetary About 7,400 consumers—29 percent of relief to customers who complain. Of the those who complained—received monetary 10 companies with the most overall com- relief from a credit card company through plaints, GE Capital Retail (40 percent of the CFPB complaints process. The median 2,087 complaints) and Discover (36 per- amount of monetary relief for consum- cent of 1,200 complaints) were the most ers with credit card complaints through likely to extend monetary relief.25 Amex mid-2013 was $128.23 An additional 10 responded with monetary relief to about percent of all complaints were closed with 20 percent of its customers’ complaints. non-monetary relief—for example, modi- There is significant variation in the fying collection proceedings or providing ways companies respond to consumer assistance with documentation. Since June complaints about different issues with 2012, when the CFPB began tracking non- credit cards. Problems with billing dis- monetary relief as a separate category, about putes resulted in monetary relief to the 2,400 consumers have had their complaints consumer in more than 40 percent of cas- resolved with some form of non-monetary es (see Figure 6, next page), while only 12 relief. (See Figure 5, next page.) percent of complaints about credit report- Companies responded to most of the ing resulted in monetary relief.

Consumer Complaints about Credit Cards 15 Figure 5. Responses to Consumer Complaints to the CFPB about Credit Cards24

Table 2. Companies by Percentage of Complaints Granted Monetary Relief26

Percent Granted Rank Company Complaints Monetary Relief 1 GE Capital Retail 2,087 39.7% 2 Discover 1,200 36.0% 3 Barclays 762 33.7% 4 Citibank 4,514 32.4% 5 JPMorgan Chase 3,176 32.2% 6 Capital One 5,265 29.5% 7 Wells Fargo 1,047 27.9% 8 U.S. Bancorp 562 24.0% 9 Bank of America 3,320 21.0% 10 Amex 1,643 20.0%

16 Credit Cards, Consumer Complaints Figure 6. Variations in Company Response by Issue27

Complaints by Issue issue with the largest number of com- The most complained-about credit plaints; Capital One and JPMorgan Chase card companies overall also tended to be had the same number of complaints about those who received the largest number of cash advances. Citibank was the most complaints about each of the individual complained-about company in seven cat- credit card issues addressed by the CFPB. egories, while JPMorgan Chase was the Capital One was the most com- most complained-about in two. Bank of plained-about credit card company in 22 America had the most complaints regard- categories, including billing disputes, the ing rewards programs.

Consumer Complaints about Credit Cards 17 Table 3. Most Complained-about Company by Issue28

Number of Issue Company Complaints Advertising and marketing Citibank 129 Application processing delay Citibank 33 APR or interest rate JPMorgan Chase 563 Arbitration Capital One 16 Balance transfer Capital One 67 Balance transfer fee Citibank 12 Bankruptcy Capital One 35 Billing disputes Capital One 826 Billing statement Citibank 165 Cash advance Capital One/JPMorgan Chase 14 Cash advance fee Citibank 18 Closing/canceling account Capital One 356 Collection debt dispute Capital One 219 Collection practices Capital One 254 Convenience checks JPMorgan Chase 13 Credit card protection /debt protection Capital One 235 Credit determination Citibank 182 Credit line increase/decrease Capital One 153 Credit reporting Capital One 438 Customer service /customer relations Capital One 125 Delinquent account Capital One 107 Forbearance/workout plans Citibank 53 Identity theft /fraud/embezzlement Capital One 409 Late fee Capital One 207 Other Capital One 300 Other fee Capital One 146 Overlimit fee Capital One 30 Payoff process Capital One 152 Privacy Capital One 34 Rewards Bank of America 120 Sale of account Capital One 18 Transaction issue Capital One 104 Unsolicited issuance of credit card Capital One 54

18 Credit Cards, Consumer Complaints Disputed Responses companies also had the highest number of complaints overall. In about one out of every five cases, a Roughly 26 percent of consumers consumer is sufficiently dissatisfied with who complained about Amex disputed the his or her credit card company’s response company’s response to their complaint— to the complaint that he or she disputes the highest ratio of disputed responses it via the CFPB. The companies with the among the 10 companies with the most most consumer-disputed responses were overall complaints. GE Capital Retail had Capital One with 1,044 disputes, Citibank the lowest percentage of responses disput- with 954 disputes and Bank of America ed among the 10 most complained-about with 712 disputes. These three credit card firms. (See Table 4.)

Table 4. Company by Highest Dispute-to-Complaint Ratio29

Percentage of Overall Rank Company Disputed Complaints Complaints Disputed 1 Amex 426 25.9% 2 U.S. Bancorp 129 23.0% 3 Bank of America 712 21.4% 4 Citibank 954 21.1% 5 Barclays 158 20.7% 6 JPMorgan Chase 634 20.0% 7 Wells Fargo 208 19.9% 8 Capital One 1,044 19.8% 9 Discover 213 17.8% 10 GE Capital Retail 283 13.6%

While GE Capital Retail had a small in purchase volume among the 10 most percentage of its responses subject to complained-about banks, while Capi- dispute, the large number of complaints tal One and Barclays were second and filed about the company led GE Capi- third. American Express had the fewest tal Retail to have the highest ratio of disputes when normalized for purchase disputed complaints per billion dollars volume (See Table 5, next page.)

Consumer Complaints about Credit Cards 19 Table 5. Company by Disputes-to-Purchases Ratio30

2012 Purchase Disputed Volume, Disputes per Billion Rank Company Complaints Billions of Dollars in Purchase Volume 1 GE Capital Retail 283 $23.7 11.0 2 Capital One 1,044 $115.6 9.0 3 Barclays 158 $30.5 5.2 4 Citibank 954 $194.7 4.9 5 Wells Fargo 208 $56.2 3.7 6 Bank of America 712 $248.6 2.9 7 Discover 213 $100.1 2.1 8 JPMorgan Chase 634 $370.8 1.7 9 U.S. Bancorp 129 $82.5 1.6 10 Amex 426 $519.5 0.8

Consumers disputed fewer responses company’s response to their complaint, from credit card companies that involved compared with more than a quarter of monetary relief than other responses. consumers whose complaints were closed About one in 10 consumers who were with only an explanation from the com- offered monetary relief disputed the pany. (See Figure 7.)

Figure 7. Percentage of Responses Disputed by Type of Response

20 Credit Cards, Consumer Complaints Complaints by State most likely to complain about their credit cards, while consumers in the Midwest and The number of complaints about credit South are least likely. The states with the card companies varies significantly from greatest number of complaints per capita state to state, even when adjusted for the were the District of Columbia, Delaware, number of residents living in each state. Maryland, New York, New Jersey, Florida, The most populous states tended Connecticut, Massachusetts, Virginia and to generate the greatest number of total Maine, all with between 10 and 25 com- complaints. The states from which the plaints per 100,000 residents. The states most complaints were filed were Cali- with the fewest complaints per capita are fornia with 3,329, New York with 2,422, North Dakota, Kentucky, and Mississippi, Florida with 2,114, Texas with 1,486, and all with fewer than four complaints per New Jersey with 1,022. (See Figure 8.) 100,000 residents. (See Figure 9, next page). Residents of Northeastern states are

Figure 8. Total Credit Card Complaints by State

Consumer Complaints about Credit Cards 21 Figure 9. Credit Card Complaints per 100,000 Residents

Most Complained-about Credit Trends in Complaints Card Companies by State over Time Capital One was the most com- The 2009 Credit CARD Act clamped plained-about credit card company in down on many of the most abusive credit 43 states, while Citibank was the most card practices and took steps to safeguard complained-about company in six states consumers in the marketplace. Yet, an av- and the District of Columbia. Bank of erage of 1,208 consumers per month have America was the most complained-about continued to complain about problems company in Alaska. with their credit cards since the CFPB first began recording complaints in November 2011. Since the peak of 1,700 complaints in June 2012, the level of consumer complaints about credit cards has been gradually declining, and has averaged about 1,090 complaints per month during the first part of 2013. (See Figure 11.)

22 Credit Cards, Consumer Complaints Figure 10. Capital One Is the Most-Complained-about Company in 43 States

Figure 11. Consumer Complaints about Credit Cards over Time

Consumer Complaints about Credit Cards 23 Conclusions and Recommendations

he Consumer Financial Protection • Consumers dispute about one out of Bureau’s Consumer Complaint Data- every five company responses to their Tbase provides a rich source of infor- credit card complaints. mation about the issues facing consumers in the financial marketplace. An analysis The Consumer Complaint Database of the Consumer Complaint Database for is an essential tool in the effort to protect complaints about credit cards reveals that: consumers from deceptive and abusive practices in the financial marketplace. • More than 25,000 complaints—an average of more than 1,200 complaints To improve the quality of the Con- per month—have been processed by sumer Complaint Database and make it the CFPB regarding credit cards. Ten more user-friendly, the CFPB should: U.S. companies account for about 93 percent of all consumer credit card • Add more detailed information to the complaints. database, such as actual complaint narratives, detailed complaint cat- • Billing disputes are the source of the egories and subcategories, complaint greatest number of complaints about resolution details, consumer dispute credit cards, followed by problems details, and data regarding member- with APR and interest rates. ship in classes protected from dis- crimination by law. Expansion of • The CFPB helped more than 7,300 complaint-level details should include consumers receive monetary relief more information about amounts and from credit card companies, while types of monetary and non-monetary credit card companies responded to relief. Software and other techniques about 2,400 consumers with offers of should be used to protect consumer non-monetary relief. privacy by giving consumers the right not to provide details and by taking

24 Credit Cards, Consumer Complaints steps to prevent the release of per- adding payday loan complaints to the sonally-identifiable information or database in November. the re-identification of consumers. It is critical that the bureau achieve the • Continue to use the information disclosure of more individual com- gathered from the Consumer Com- plaint details while simultaneously plaint Database, from supervisory making every reasonable effort to and examination findings, and from protect personal data. other sources to require a high, uniform level of consumer protection, to • Add features such as clear definitions protect consumers, and to ensure that of terms and instructions. responsible industry players can better compete with those who are using • Provide regular trend analyses and harmful practices. monthly detailed reports on complaint resolutions and disputes. • Move quickly to implement strong rules, based on consumer complaints • Simplify the interfaces that allow users and findings from recent reports, to to summarize complaint database re- protect consumers from unfair over- ports in graphical and printable formats. draft practices and high-cost direct- deposit advance bank loans and pay- • Publicize information about the day loans. The bureau should also CFPB complaints process in forums move quickly to complete the manda- that are likely to be seen by credit card tory arbitration studies required be- users. The agency should develop fore it can ban or regulate the use of more outreach mechanisms for con- pre-dispute mandatory arbitration in sumer education about the database consumer financial contracts. and its services for consumers, including through the creation of education- • Continue monitoring the effective- al materials to be distributed on- and ness of the Credit CARD Act in re- off-line, through more events outside ducing the incidence of punitive in- Washington, D.C., and through non- terest rate increases and unfair fees, profit organizations. ensuring that customers charged punitive interest rates have the terms of • Develop free applications (apps) for their accounts reviewed periodically, consumers to download to smart- and forcing firms to use rational crite- phones allowing them to complain ria for determining when a bill is due about a firm and providing informa- and when it is paid late. As CFPB Di- tion about how to review complaints rector Richard Cordray pointed out at in the database. an October 2013 hearing in Chicago, “[The Credit CARD Act has resulted To improve the effectiveness of the in] a shift from hidden back-end pric- CFPB, the agency should: ing toward more transparent front- end pricing that consumers can un- • Expand the Consumer Complaint derstand and evaluate more easily.” Database to include discrete complaint categories for credit products • Continue to police the credit card such as auto title loans and prepaid marketplace aggressively, including cards. We commend the CFPB for by scrutinizing high-cost identity

Conclusions and Recommendations 25 theft, credit score monitoring, and should also monitor the continued use credit life insurance and debt can- of unfair balance calculation methods cellation products, among others. resulting in unfair “trailing” or “re- The CFPB’s recovery of nearly $800 sidual” interest charges imposed on million from four credit card com- amounts already paid off. panies for deceptive practices—primarily for consumers victimized by • Protect students by extending the deceptive marketing of credit card Credit CARD Act’s provisions requir- add-on products—is an example of ing university-branded credit card con- the benefits such scrutiny can bring tracts to also include disclosure of any for consumers. contracts for student loan disbursement debit cards, student ID cards, • Address card issues not solved by the and other co-branded debit or prepaid Credit CARD Act, including the con- cards on campus. This would protect tinuing problems caused by high-cost, students whose colleges are outsourc- low-balance “fee harvester” credit ing the disbursement of student aid to cards targeted at previously bank- financial firms or are allowing banks to rupt or risky consumers. The CFPB brand student ID or debit cards.31

26 Credit Cards, Consumer Complaints Methodology

The Consumer of 2012 Nilson Report numbers, available online at www.statista.com/ Complaint Database statistics/245507/top-credit-card- The Consumer Financial Protection issuers-in-the-united-states-by- Bureau (CFPB) maintains a database of purchase-volume. complaints submitted by customers about banks and other financial institutions. The database is available for download online at www.consumerfinance.gov/ Normalizing Complaints complaintdatabase. Our analysis of the credit cards sector focuses on the distribu- by State Population tion of complaints by state, by company, 2010 U.S. Census data were taken from by “service” (equivalent to the “product” the U.S. Census Bureau, apportionment field in the CFPB database), and by “is- data for 2010, available at www.census. sue” (equivalent to the “sub-product” field gov/population/apportionment/files/ in the CFPB database). It includes com- Apportionment%20Population%202010. plaints posted to the database through pdf. We then divided the number of September 10, 2013. consumer complaints against individual Credit card purchase volume data state populations to normalize for state were sourced from Statista’s compilation population size.

Methodology 27 Appendix A: Detailed Data Tables for Complaints Regarding Credit Cards

Table A-1. Credit Card Companies by Total Number of Complaints

Rank Company Complaints Rank Company Complaints 1 Capital One 5,265 26 BBVA Compass 29 2 Citibank 4,514 27 BMO Harris 29 3 Bank of America 3,320 28 M&T Bank 24 4 JPMorgan Chase 3,176 29 Resurgent Capital 23 5 GE Capital Retail 2,087 Services L.P. 6 Amex 1,643 30 Commerce Bank 20 7 Discover 1,200 31 Sovereign Bank 20 8 Wells Fargo 1,047 32 Experian 17 9 Barclays 762 33 Banco Popular de 16 Puerto Rico 10 U.S. Bancorp 562 34 Comerica 15 11 First National 212 Bank of Omaha 35 Equifax 14 12 USAA Savings 197 36 UMB Bank 13 13 PNC Bank 150 37 Bank of the West 12 14 Fifth Third Bank 132 38 KeyBank NA 9 15 HSBC 128 39 Army and Air 8 Force Exchange 16 TD Bank 125 Service 17 RBS Citizens 82 40 Sterling Jewelers 8 18 Regions 74 Inc. 19 Navy FCU 62 41 Banco Santander 6 20 SunTrust Bank 62 Puerto Rico 21 BB&T Financial 40 42 First Citizens 6 22 Pentagon FCU 39 43 FirstMerit Bank 6 23 State Farm Bank 38 44 PayPal 6 24 First Niagara Bank 37 45 The Huntington 6 25 Synovus Bank 34 National Bank

28 Credit Cards, Consumer Complaints Table A-2. Complaints Per 100,000 Residents by State

Complaints per Complaints per Rank State Complaints 100,000 residents Rank State Complaints 100,000 residents 1 DC 146 24.3 27 OR 259 6.7 2 DE 178 19.8 28 SD 53 6.5 3 MD 793 13.7 29 MN 340 6.4 4 NY 2,422 12.5 30 TN 406 6.4 5 NJ 1,022 11.6 31 AK 44 6.1 6 FL 2,114 11.2 32 SC 274 5.9 7 CT 396 11.1 33 TX 1,486 5.9 8 MA 715 10.9 34 NM 118 5.7 9 VA 874 10.9 35 KS 157 5.5 10 ME 137 10.3 36 MO 326 5.4 11 NH 130 9.8 37 MI 535 5.4 12 CO 496 9.8 38 NE 92 5.0 13 NV 258 9.5 39 UT 138 5.0 14 VT 58 9.2 40 IA 151 4.9 15 RI 95 9.0 41 WY 28 4.9 16 CA 3,329 8.9 42 OK 183 4.9 17 AZ 540 8.4 43 AL 232 4.8 18 GA 802 8.2 44 MT 47 4.7 19 OH 910 7.9 45 WV 82 4.4 20 ID 118 7.5 46 IN 274 4.2 21 HI 102 7.5 47 AR 121 4.1 22 WA 496 7.3 48 LA 183 4.0 23 IL 934 7.3 49 MS 112 3.8 24 PA 924 7.3 50 KY 155 3.6 25 NC 694 7.3 51 ND 20 3.0 26 WI 384 6.7

Appendix A: Detailed Data Tables for Complaints Regarding Credit Cards 29 Table A-3. Most Complained-about Credit Card Company by State

State Company State Company AK Bank of America MT Capital One AL Capital One NC Capital One AR Capital One ND Capital One AZ Capital One NE Capital One CA Capital One NH Capital One CO Capital One NJ Capital One CT Citibank NM Citibank DC Citibank NV Capital One DE Capital One NY Citibank FL Capital One OH Capital One GA Capital One OK Capital One HI Capital One OR Capital One IA Capital One PA Capital One ID Capital One RI Capital One IL Capital One SC Capital One IN Capital One SD Capital One KS Capital One TN Capital One KY Capital One TX Capital One LA Capital One UT Citibank MA Capital One VA Capital One MD Citibank VT Capital One ME Citibank WA Capital One MI Capital One WI Capital One MN Capital One WV Capital One MO Capital One WY Capital One MS Capital One

30 Credit Cards, Consumer Complaints Table A-4. Number and Percentage of Overall Complaints by Issue

Percent of Overall Rank Issue Complaints Complaints 1 Billing disputes 4,138 16.3% 2 APR or interest rate 2,431 9.6% 3 Identity theft/fraud/embezzlement 1,719 6.8% 4 Credit reporting 1,701 6.7% 5 Closing/canceling account 1,675 6.6% 6 Other 1,488 5.9% 7 Late fee 1,036 4.1% 8 Collection practices 1,003 4.0% 9 Collection debt dispute 901 3.5% 10 Credit determination 887 3.5% 11 Credit card protection/debt protection 881 3.5% 12 Credit line increase/decrease 769 3.0% 13 Payoff process 747 2.9% 14 Billing statement 695 2.7% 15 Customer service/customer relations 687 2.7% 16 Other fee 662 2.6% 17 Advertising and marketing 632 2.5% 18 Rewards 608 2.4% 19 Transaction issue 581 2.3% 20 Delinquent account 378 1.5% 21 Unsolicited issuance of credit card 323 1.3% 22 Balance transfer 315 1.2% 23 Forbearance/workout plans 237 0.9% 24 Application processing delay 157 0.6% 25 Privacy 122 0.5% 26 Bankruptcy 121 0.5% 27 Cash advance 85 0.3% 28 Arbitration 84 0.3% 29 Overlimit fee 79 0.3% 30 Sale of account 68 0.3% 31 Cash advance fee 65 0.3% 32 Balance transfer fee 64 0.3% 33 Convenience checks 46 0.2%

Appendix A: Detailed Data Tables for Complaints Regarding Credit Cards 31 Table A-5. Company by Number of Complaints by Issue32

COMPANY U.S. Bancorp Capital One Wells Fargo GE Capital JPMorgan Discover AmericaBank of Barclays Citibank Amex Retail Chase SUM

ISSUE Advertising and marketing 80 55 30 106 129 43 35 88 17 14 597 Application processing delay 17 6 2 27 33 10 21 11 6 6 139 APR or interest rate 71 239 99 425 436 146 171 563 64 95 2,309 Arbitration 8 15 3 16 6 7 2 12 1 5 75 Balance transfer 8 41 9 67 54 20 9 50 10 11 279 Balance transfer fee 1 12 4 4 12 3 0 9 4 8 57 Bankruptcy 8 15 3 35 13 9 4 15 3 6 111 Billing disputes 277 539 111 826 790 187 375 437 99 179 3,820 Billing statement 48 88 16 132 165 22 84 62 10 25 652 Cash advance 7 12 3 14 11 9 4 14 1 5 80 Cash advance fee 1 14 0 11 18 2 1 5 1 6 59 Closing/canceling account 141 299 50 356 284 40 122 188 24 61 1,565 Collection debt dispute 47 134 17 219 155 61 89 87 11 28 848 Collection practices 73 92 13 254 186 66 87 105 18 31 925 Convenience checks 0 12 2 9 6 1 0 13 1 0 44 Credit card protection/debt 31 137 16 235 155 71 49 95 13 35 837 protection Credit determination 59 54 29 147 182 30 116 109 20 52 798 Credit line increase/decrease 95 113 15 153 137 28 53 102 7 27 730 Credit reporting 104 272 44 438 273 60 144 186 29 40 1,590 Customer service/customer 51 101 29 125 114 35 51 78 11 25 620 relations Delinquent account 14 44 4 107 72 26 32 39 7 6 351 Forbearance/workout plans 11 34 5 52 53 13 21 23 3 7 222 Identity theft/fraud/ embezzlement 98 206 60 409 241 91 132 242 43 71 1,593 Late fee 66 95 16 207 215 14 158 63 23 93 950 Other 102 203 52 300 241 89 113 176 34 66 1,376 Other fee 35 127 23 146 127 22 28 49 25 30 612 Overlimit fee 3 6 2 30 11 0 5 10 3 4 74 Payoff process 30 87 17 152 149 32 80 109 20 33 709 Privacy 8 16 5 34 14 10 9 20 2 0 118 Rewards 90 120 37 53 98 18 10 103 23 11 563 Sale of account 2 15 5 18 6 1 3 5 2 2 59 Transaction issue 48 85 25 104 75 22 47 72 18 32 528 Unsolicited issuance of credit card 9 32 16 54 53 12 32 36 9 33 286 GRAND TOTAL 1,643 3,320 762 5,265 4,514 1,200 2,087 3,176 562 1,047 23,576

32 Credit Cards, Consumer Complaints Table A-6. Company by Percentage of Complaints by Issue33

COMPANY U.S. Bancorp Capital One Wells Fargo GE Capital JPMorgan Discover AmericaBank of Barclays Citibank Amex Retail Chase

ISSUE Advertising and marketing 4.9% 1.7% 3.9% 2.0% 2.9% 3.6% 1.7% 2.8% 3.0% 1.3% Application processing delay 1.0% 0.2% 0.3% 0.5% 0.7% 0.8% 1.0% 0.3% 1.1% 0.6% APR or interest rate 4.3% 7.2% 13.0% 8.1% 9.7% 12.2% 8.2% 17.7% 11.4% 9.1% Arbitration 0.5% 0.5% 0.4% 0.3% 0.1% 0.6% 0.1% 0.4% 0.2% 0.5% Balance transfer 0.5% 1.2% 1.2% 1.3% 1.2% 1.7% 0.4% 1.6% 1.8% 1.1% Balance transfer fee 0.1% 0.4% 0.5% 0.1% 0.3% 0.3% 0.2% 0.3% 0.7% 0.8% Bankruptcy 0.5% 0.5% 0.4% 0.7% 0.3% 0.8% 0.0% 0.5% 0.5% 0.6% Billing disputes 16.9% 16.2% 14.6% 15.7% 17.5% 15.6% 18.0% 13.8% 17.6% 17.1% Billing statement 2.9% 2.7% 2.1% 2.5% 3.7% 1.8% 4.0% 2.0% 1.8% 2.4% Cash advance 0.4% 0.4% 0.4% 0.3% 0.2% 0.8% 0.2% 0.4% 0.2% 0.5% Cash advance fee 0.1% 0.4% 0.0% 0.2% 0.4% 0.2% 0.0% 0.2% 0.2% 0.6% Closing/canceling account 8.6% 9.0% 6.6% 6.8% 6.3% 3.3% 5.8% 5.9% 4.3% 5.8% Collection debt dispute 2.9% 4.0% 2.2% 4.2% 3.4% 5.1% 4.3% 2.7% 2.0% 2.7% Collection practices 4.4% 2.8% 1.7% 4.8% 4.1% 5.5% 4.2% 3.3% 3.2% 3.0% Convenience checks 0.0% 0.4% 0.3% 0.2% 0.1% 0.1% 0.0% 0.4% 0.2% 0.0% Credit card protection /debt 1.9% 4.1% 2.1% 4.5% 3.4% 5.9% 2.3% 3.0% 2.3% 3.3% protection Credit determination 3.6% 1.6% 3.8% 2.8% 4.0% 2.5% 5.6% 3.4% 3.6% 5.0% Credit line increase/decrease 5.8% 3.4% 2.0% 2.9% 3.0% 2.3% 2.5% 3.2% 1.2% 2.6% Credit reporting 6.3% 8.2% 5.8% 8.3% 6.0% 5.0% 6.9% 5.9% 5.2% 3.8% Customer service /customer 3.1% 3.0% 3.8% 2.4% 2.5% 2.9% 2.4% 2.5% 2.0% 2.4% relations Delinquent account 0.9% 1.3% 0.5% 2.0% 1.6% 2.2% 1.5% 1.2% 1.2% 0.6% Forbearance/workout plans 0.7% 1.0% 0.7% 1.0% 1.2% 1.1% 1.0% 0.7% 0.5% 0.7% Identity theft/fraud /embezzlement 6.0% 6.2% 7.9% 7.8% 5.3% 7.6% 6.3% 7.6% 7.7% 6.8% Late fee 4.0% 2.9% 2.1% 3.9% 4.8% 1.2% 7.6% 2.0% 4.1% 8.9% Other 6.2% 6.1% 6.8% 5.7% 5.3% 7.4% 5.4% 5.5% 6.0% 6.3% Other fee 2.1% 3.8% 3.0% 2.8% 2.8% 1.8% 1.3% 1.5% 4.4% 2.9% Overlimit fee 0.2% 0.2% 0.3% 0.6% 0.2% 0.0% 0.2% 0.3% 0.5% 0.4% Payoff process 1.8% 2.6% 2.2% 2.9% 3.3% 2.7% 3.8% 3.4% 3.6% 3.2% Privacy 0.5% 0.5% 0.7% 0.6% 0.3% 0.8% 0.4% 0.6% 0.4% 0.0% Rewards 5.5% 3.6% 4.9% 1.0% 2.2% 1.5% 0.5% 3.2% 4.1% 1.1% Sale of account 0.1% 0.5% 0.7% 0.3% 0.1% 0.1% 0.1% 0.2% 0.4% 0.2% Transaction issue 2.9% 2.6% 3.3% 2.0% 1.7% 1.8% 2.3% 2.3% 3.2% 3.1% Unsolicited issuance of credit card 0.5% 1.0% 2.1% 1.0% 1.2% 1.0% 1.5% 1.1% 1.6% 3.2%

Appendix A: Detailed Data Tables for Complaints Regarding Credit Cards 33 Appendix B: Searchable Public Databases of Complaints to Government Agencies

he CFPB’s searchable complaint da- concerning their finances and to enhance tabase is the newest of a set of federal the market’s ability to operate efficiently Tgovernment complaint databases that and transparently. The CFPB provides help consumers make better economic public access to an electronic database that and safety choices by reviewing others’ contains individual fields for each unique experiences and searching for problems complaint. In short, this allows consum- or product recalls. This transparency also er complaints to be easily accessible in helps firms improve their products and a data-rich form. The CFPB’s goal is to services. Here is information on how to improve the transparency and efficiency contact the CFPB and some of the other of the monetary market and further em- public databases maintained by govern- power the American consumer. ment agencies. U.S. PIRG Education The database can be viewed at: www. Fund visited each of the other databases consumerfinance.gov/complaintdatabase. and a quick overview of their contents and Consumers may submit complaints ease of use is below. A more detailed re- to the CFPB at www.consumerfinance. view can be found at www.uspirgedfund. gov/complaint. org/issues/usf/consumer-tips. Consumer complaints can also be CFPB’s Searchable Financial Ser- made by phone (855) 411-2372, fax (855) vices Complaint Database: The CFPB 237-2392, postal mail (1700 G Street, Consumer Complaint Database discloses NW Washington, D.C. 20552), and/or data associated with financial institutions e-mail ([email protected]). and their practices to help provide con- Safercar.gov: The National Highway sumers with recent and comprehensive Traffic Safety Administration (NHTSA), information to make responsible decisions according to its website, was established in

34 Credit Cards, Consumer Complaints 1970 to direct highway safety and consumer Improvement Act was passed; the new programs. 34 Safercar.gov, established online law established authority for a searchable in 1994, allows consumers to identify and public consumer products database that report problems or file a complaint about went live in 2011. their vehicle, tires, equipment or car seats The main page for the website is: by phone, by filling out a PDF for email, www.saferproducts.gov. Complaints or electronically on the agency’s website. may be filed at: www.saferproducts. All information to file a complaint or gov/CPSRMSPublic/Incidents/ search the database can be found on the ReportIncident.aspx. At the main website’s home page, www.safercar.gov. page (www.saferproducts.gov/Search/ Logging onto the website, consumers can default.aspx) consumers and researchers quickly and easily navigate to see other can view incident reports or recalls or complaints (www.odi.nhtsa.dot.gov/ both, by category, or can export the owners/SearchComplaints) as well as database for additional analysis. find the link to file their own complaint and U.S. PIRG Education Fund’s access investigations, complaints or recall Overall Review for Saferproducts. reports (www.odi.nhtsa.dot.gov/owners/ gov: When searching recalls on SearchVehicles). The database can also be saferproducts.gov, consumers are easily exported (downloaded) for further analysis at able to search directly for what they’re www.odi.nhtsa.dot.gov/downloads. looking for. The website is broken down U.S. PIRG Education Fund’s into easily identifiable sections; whether Overall Review for Safercar.gov: This the consumer is seeking to file a report user website is generally easy to navigate or review reports and recalls, the site and accessible for the average consumer. offers links to each popular section on The homepage clearly gives the consumer the homepage for consumers. Although specific tabs on the homepage labeled the actual database of consumer reports “vehicle shoppers,” “vehicle owners,” and recalls is somewhat difficult to “vehicle manufacturers” and “parents download, understand and read, the central” for general navigation. Also average consumer isn’t looking for details included on the homepage are direct on specific products through use of the links (on the right side of the page by the full database. The average consumer will scroll bar) to file a complaint, search for instead use the easy to use online search recalls and previous complaints, and get engine, which includes photos and icons help with a car seat. The actual process of for complaint categories, and specific tabs filing a complaint is straightforward and is and links to navigate to the pages of the broken down in such a way that is not time site they wish to view. consuming. Air Travel Consumer Report: Saferproducts.gov: The United The United States Department of States Consumer Product Safety Transportation (DOT), established by act Commission (CPSC), created in 1972 of Congress in 1966, supervises vital means through the Consumer Product Safety of transportation throughout the U.S., Act, is an independent agency of the including travel by air.35 The Air Travel United States government. It has authority Consumer Report is a monthly product of to investigate and recall 15,000 different the Department of Transportation’s Office types of consumer products ranging from of Aviation Enforcement and Proceedings toasters and dishwashers to bicycles, (OAEP). The report is designed to assist clothing, cribs and children’s toys. In consumers with information on the 2008 the Consumer Product Safety quality of services provided by the airlines.

Appendix B: Searchable Public Databases of Complaints to Government Agencies 35 The home page for the U.S. DOT MyEdDebt.com: The U.S. Depart- is www.dot.gov. The link for filing ment of Education, at the urging of the complaints is: www.dot.gov/airconsumer/ National Consumer Law Center, has re- file-consumer-complaint. The link for cently improved the borrower complaint reviewing monthly reports is www.dot. process by allowing access to a centralized gov/airconsumer/air-travel-consumer- complaint system.36 This has been a crucial reports. The DOT maintains a fact sheet of step forward for defaulted borrowers who air travel tips for consumers available here: previously could not find the complaints www.dot.gov/airconsumer/air-travel-tips. section when visiting the federal student U.S. PIRG Education Fund’s aid website, and were not given specific Overall Review for U.S. DOT: Air travel guidance with the most common concerns. complaint reports are issued monthly. U.S. PIRG Education Fund’s Unlike the other databases, which Overall Suggestions: Using the can be searched and downloaded, the CFPB’s complaints database as a model, DOT air travel database is summarized we recommend that the Department into monthly reports in PDF format. of Education also create a searchable It includes information on air travel database to track all federal borrower problems including on-time arrivals, lost complaints, outside of those for which luggage disputes and bumping complaints. the borrower is in default. Additionally, U.S. PIRG Education Fund has on several the department should make aggregated occasions urged the DOT to make these complaint data public. Tracking the data more user-friendly to consumers and data will help borrowers and advocates, researchers. The DOT does maintain but most importantly could be used other pages of downloadable information, by the agency to drive oversight and but not for air travel complaints. compliance actions.

36 Credit Cards, Consumer Complaints Endnotes

1 Nerdwallet.com, American Household Credit Card 9 (1) Consumer Financial Protection Bureau, CFPB Debt Statistics: 2013, accessed 8 November 2013 Report Highlights Problems in Market Discovered at www.nerdwallet.com/blog/credit-card-data/ Through Supervisory Actions (press release), 31 Octo- average-credit-card-debt-household. Note that the ber 2012. (2) The credit card companies penalized median credit card debt is much lower; a minority are Capital One ($140 million in consumer refunds; of very highly-indebted households raise the average $25 million in penalties ordered by the CFPB, July dramatically. 2012); Discover Card and Discover Bank ($200 million in refunds; $14 million in penalties ordered by 2 Sam Zuckerman, “How Providian Misled Card the CFPB and FDIC, September 2012); American Holders,” San Francisco Chronicle, 5 May 2002. Express and related companies ($85 million in refunds; $14 million in penalties ordered by the CFPB 3 Ibid. and $13 million in penalties ordered by other regu- lators, October 2012); and JP Morgan Chase Bank 4 Consumer Financial Protection Bureau, CARD ($309 million in refunds; $20 million in penalties Act Report: A Review of the Impact of the CARD Act ordered by the CFPB and $60 million in penalties on the Consumer Credit Card Market, 1 October ordered by the OCC, September 2013). Sources: 2013. Consumer Financial Protection Bureau, CFPB Or- ders Chase and JPMorgan Chase to Pay $309 Million 5 Alexandra Alper, “Insight: Little Comfort Seen in Refund for Illegal Credit Card Practices (press release), Credit Protection,” Reuters,16 November 2011. 19 September 2013; Consumer Financial Protec- tion Bureau, CFPB Probe into Capital One Credit Card 6 Ed Mierzwinski, “More Credit Card Banks Quit Marketing Results in $140 Million Consumer Refund Evil Ways” (blog), U.S. PIRG, 22 August 2012. (press release), 18 July 2012; Consumer Financial Protection Bureau, Federal Deposit Insurance Corpo- 7 Consumer Financial Protection Bureau, The ration and Consumer Financial Protection Bureau Order CFPB Takes Action Against Mortgage Insurers to End Discover to Pay $200 Million Consumer Refund for De- Kickbacks to Lenders (press release), 4 April 2013. ceptive Marketing (press release), 24 September 2012; Consumer Financial Protection Bureau, CFPB Or- 8 Consumer Financial Protection Bureau, Analysis of ders American Express to Pay $85 Million Refund to Differences between Consumer- and Creditor-Purchased Consumers Harmed by Illegal Credit Card Practices Credit Scores, September 2012. (press release), 1 October 2012.

10 Consumer Financial Protection Bureau, About Us, accessed at www.consumerfinance.gov/the- bureau, 23 July 2013.

11 Ibid.

Endnotes 37 12 Ibid. 23 Consumer Financial Protection Bureau, Con- sumer Response: A Snapshot of Complaints Received, 13 Consumer Financial Protection Bureau, Consumer July 2013. Response: A Snapshot of Complaints Received, March 2013. 24 The CFPB changed the way it categorized resolutions in mid-2012 to provide greater detail. Previ- 14 Ibid.; Consumer Financial Protection Bureau, Sub- ously, the CFPB had characterized resolutions as mit a Complaint, accessed at www.consumerfinance. “closed with relief” or “closed without relief,” with gov/complaint, 23 July 2013 “relief” defined as equivalent to “monetary relief.” To account for the frequent practice by firms of 15 Consumer Financial Protection Bureau, New offering non-monetary forms of relief, the CFPB Ways to Combat Harmful Debt Collection Practices, changed its categorization to include four catego- 10 July 2013. ries: “closed with monetary relief,” “closed with non-monetary relief,” “closed without relief,” and 16 Complaints are excluded from the database that “closed.” To capture the full history of CFPB ac- are duplicative or that name the wrong company. tivity, complaints listed in the former “closed with Complaints are added to the database once a com- relief” category are included in the “closed with pany has responded or after the complaint has monetary relief” category, while those in the for- been held by the company without response for mer “closed without relief” category are included 15 days. Source: Consumer Financial Protection in the “closed with explanation” category. The Bureau, Consumer Complaint Database: Technical “closed with non-monetary relief” category only Documentation, accessed at www.consumerfinance. includes those since June 2012. Complaints cat- gov/complaintdatabase/technical-documentation, egorized as “closed” are described here as “closed 31 July 2013. with no relief or explanation” for the sake of clar- ity. See Consumer Financial Protection Bureau, 17 As of 29 December 2013. Semi-Annual Report of the Consumer Financial Pro- tection Bureau: July 1, 2012—December 31, 2012, 18 Includes only the 15 issues with the highest over- March 2013. all number of complaints. Other categories are grouped here under “All other issues,” which in- 25 As measured by percentage of cases granted mon- cludes complaints about credit card rewards pro- etary relief. grams, cash advance fees and fees for exceeding the specified credit limit. The “Other” category 26 Includes only the 10 companies with the most includes complaints that do not fit into any exist- overall complaints. ing CFPB category. For a complete list of issues by percentage and number of complaints, see Ap- 27 Does not include complaints in progress, closed pendix A. without explanation or relief, or responded to in an untimely fashion. Only includes the five issues 19 Gibson Dunn, The Consumer Financial Protection with the most overall complaints. Bureau: Its Foundation, Authorities, and First Year of Enforcement, 5 June 2013. 28 See note 26.

20 On 10 December 2013, GE Capital Retail became 29 Ibid. the fifth credit card company fined by the CFPB for unfair practices. Source: Consumer Financial 30 Ibid. Protection Bureau, CFPB Orders GE CareCredit to Refund $34.1 Million for Deceptive Health-Care 31 In December, the CFPB called for voluntary dis- Credit Card Enrollment (press release), 10 Decem- closure of these contracts. See Consumer Finan- ber 2013. cial Protection Bureau, CFPB Calls on Financial Institutions to Publicly Disclose Campus Financial 21 This analysis normalizes for purchase volume, or Agreements (press release),17 December 2013. the dollar amount of purchases on that company’s cards. It is an imperfect measurement of the num- 32 See note 26. ber of purchases made, since the dollar amount per purchase may vary depending on the relative 33 Ibid. wealth and spending habits of the company’s cli- ent base. 34 National Highway Traffic Safety Administration, NHTSA: People Saving People, accessed 7 Novem- 22 Statista.com, “Top credit card issuers in the Unit- ber 2013 at www.safercar.gov/About+NHTSA. ed States, by purchase volume (in billion U.S. dollars),” accessed 31 December 2013 from http:// 35 United States Department of Transportation, www.statista.com/statistics/245507/top-credit- About Us, accessed 7 November 2013 at www.dot. card-issuers-in-the-united-states-by-purchase- gov/mission/about-us. volume. 36 National Consumer Law Center, Borrowers on Hold: 2013 Update, 14 March 2013.

38 Credit Cards, Consumer Complaints