There has been surge of more than 40% in consumer financial complaints during the pandemic, led by issues with credit reporting and money-transfer services, according to a report this week from LendEDU.
The Consumer Financial Protection Bureau received more than 140,000 complaints between March 13 and July 17, up from just over 97,000 complaints during the same timeframe in 2019, the report found.
Most of the issues that consumers brought to the government agency had to do with credit reporting (up by 84%); money transfer services and virtual currency (up 77%); and credit or prepaid cards (up 29%). Meanwhile, issues involving student loans were down by 41%, almost certainly due to the automatic freeze placed on federal loan payments through Sept. 30, the group noted.
“Financial institutions have shown a willingness to be flexible with customers, but it appears this unprecedented situation has made a mess of the relationship between consumers, financial institutions and credit bureaus,” the report read. “Consumers are suffering the most as a result.”
Lenders promised some relief to people who had trouble making payments on time, but “many of these agreements were never really confirmed or finalized because many consumers saw their credit scores negatively impacted for missed or insufficient payments.”
The report is based on an analysis of publicly reported data from the CFPB.
Even though overall complaints about student loans were down, borrowers did make more reports in certain areas, including problems with a credit agency’s investigation into existing issues, up by 104% for federal loans and by 17% for private loans, and improper information being included on credit reports, 10% higher for federal loans and 35% for private loans, according to the LendEDU.
Meanwhile, complaints about money-transfer products have skyrocketed, the report noted.
Complaints about being able to add money to a mobile or digital “wallet” have increased by more than 3,000%. There was also a 900% rise in consumers’ raising issues about “confusing or misleading disclosures” for virtual currencies, according to LendEDU.
Consumers also made more reports about scams involving check-cashing services, with the number of complaints up 150%, the report found.
As our second lead editor, Cindy Hamilton covers health, fitness and other wellness topics. She is also instrumental in making sure the content on the site is clear and accurate for our readers. Cindy received a BA and an MA from NYU.