On October 25, 2016, the Consumer Financial Protection Bureau (CFPB) released its monthly complaint report. For the month of September 2016, the products and services receiving the most complaints were debt collection, credit reporting, and mortgages. These three topics collectively represented almost two-thirds of the complaints submitted. Notably, debt collection complaints declined by 24 percent and credit reporting complaints declined by 5 percent compared to the August 2016 figures. In addition, comparing data from the period July-September 2016 with data from July-September 2015, complaints related to payday loans fell 21 percent while complaints related to student loans increased by 96 percent.
The report focused on complaints about prepaid accounts, highlighting three issues in particular: unauthorized transactions; lack of access to funds; and unexpected fees.
Regarding these issues, the CFPB reported the following specifics about prepaid account complaints:
- Unauthorized transactions: Consumers complained of unauthorized transactions on their accounts and described having to contact providers repeatedly before they took action. In some cases, consumers reported having prepaid cards cancelled with no explanation.
- Lack of Access to Funds: Consumers complained of declined transactions that providers attributed to improper product registration. To resolve this issue, companies sometimes required that consumers provide proof of purchase in the form of receipts and the original packaging of the product.
- Unexpected Fees: Consumers also reported receiving refunds in the form of prepaid cards that they were unable to activate. Consumers reported that providers charged dormancy fees, adding to their financial hardship.
The Bureau’s focus on prepaid account complaints complements its issuance of its final prepaid accounts rule on October 5, 2016. The final prepaid accounts rule requires that providers of prepaid products, such as prepaid cards and mobile wallets, provide consumers with certain disclosures and account protections by October 1, 2017.