As 2020 is coming to an end, we're wrapping up this blog series by taking a look at the trends that shaped 2019 and 2020 to give insight into what we can expect in the regulatory and marketing compliance space in 2021, and how consumer finance companies can stay ahead of the game.
Trends by Year
We aggregated consumer complaint data for financial products and services from the CFPB and FTC consumer complaint databases to get some insight on annual complaint trends. Here's what we found:
- Credit reporting and debt collection are continuing to rise year-over-year-read this blog for more insights
- Complaints against credit cards and bank accounts and services have increased 7.9% and 3.4% year-over-year, respectively
- Mortgage-related complaints have been on a decline in recent years…until the coronavirus pandemic and CARES Act in 2020. Check out this blog for some in-depth information about the mortgage industry
- Student loan complaints peaked in 2017 and have been on the decline since, following the FTC's nationwide crackdown on student loan debt relief scams (titled Operation Game of Loans)
Trends by Product
- The most complained about product in 2019 was credit reporting, accounting for 40% of all FTC complaints
- Mortgage, credit cards, and bank accounts and services were the top complained about products behind credit reporting and debt collection, accounting for 34% of FTC complaints
2020 So Far
As of September 2020, there are 405,966 complaints in the CFPB's database-more complaints than any previous year (and this year isn't even over yet!). It's fair to say that many of these complaints may have been sparked by the COVID pandemic (read more in our blog here), but what do these complaint trends look like for 2020?
So far in 2020, credit reporting and debt collection are still the leaders in the most complained about products in the CFPB's database, followed by credit cards (23,812 complaints), mortgages (18,246 complaints), and checking or savings accounts (17,052 complaints).
Consumers are likely more sensitive to their financial wellbeing since the COVID-19 pandemic, and are more inclined to submit a complaint against companies that aren't providing them the help they need-especially for credit cards, mortgages, and checking and savings accounts.
What's Ahead for 2021?
As the pandemic continues on, it's likely that we'll continue to see increased complaint counts to the CFPB and FTC. And, with the anticipation of a Biden Administration taking the White House in January, we can expect an increase in regulatory scrutiny and enforcement actions-many of which are signaled by consumer complaints.
In 2021, it's critical to keep an eye on the complaints that consumers are submitting about your organization-and others that provide similar services-to get out ahead of enforcement actions.
For more insights on key consumer complaint trends, download the full 2020 report. If you'd like to learn how PerformLine can help your organization prepare for heightened regulatory scrutiny and optimize your compliance program, speak to one of our experts today.