The CFPB last week released a monthly complaint report highlighting complaints submitted by older consumer. The snapshot shows that older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred interest credit cards and charges for unauthorized add-on products.
Here’s the complete press release from the CFPB:
WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) released a monthly complaint report highlighting complaints submitted by older consumers. The snapshot shows that older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred interest credit cards, and charges for unauthorized add-on products. The snapshot provides an overview and analysis of more than 103,100 complaints submitted to the Bureau by consumers voluntarily reporting their age as 62 or older.
“Older consumers who may be on a fixed income are at a greater risk for financial trouble if they encounter problems with financial products or services,” said CFPB Director Richard Cordray. “The complaints submitted by older consumers are important for the Bureau to ensure we are properly looking out for this segment of the population.”
Older Consumer Complaint Issues
With more than 10,000 Americans turning 62 every day, older consumers are one of the fastest growing consumer groups in the marketplace. While older consumers are living longer and healthier lives than ever before, a growing number of older consumers face financial exploitation, struggles with debt, and entering retirement with limited savings. The findings below highlight issues that, while relevant to consumers of all ages, are seen more frequently in complaints submitted in 2017 by older consumers:
- Servicing problems with reverse mortgages: Reverse mortgages, exclusively available to people over 62 years of age, are a special type of loan that allows people to borrow against the equity in their homes. Older consumers with reverse mortgages seeking to stay in their house following the death of the borrowing spouse report servicing problems that sometimes result in foreclosure proceedings. A 2015 report published by the Bureau examines consumer frustrations surrounding reverse mortgages.
- Difficulty recovering from financial scams: Older consumers are often the target of financial scams and identity theft. Older consumers working to recover from scams or exploitation have complained about difficulty with correcting credit reports, disputing charges with credit card companies, and attempting to regain money that was withdrawn from their bank accounts.
- Confusion about deferred interest and zero interest credit card offers: Some older consumers on fixed incomes use credit cards to pay for unanticipated large expenses, such as medical needs. Consumers complain about confusion understanding credit card terms and conditions. One particular example highlighted in the report are complaints from older consumers about struggles to understand the distinction between deferred interest and zero interest offers.
- Fees charged for unwanted add-on products and services: Some older consumers complain about being charged for items such as credit monitoring services they did not sign up for. Some of these consumers also complained that they were enrolled in these types of programs without proper disclosure of the program and its costs.
Older Consumer Complaint Trends and Statistics
Of the 1,163,200 complaints the Bureau has handled since it began accepting complaints in July 2011, 54 percent of consumers have voluntarily reported their age. Of those, over 103,000 have come from consumers who report that they are 62 years old or older. Below is a breakdown of those complaints along category and state lines:
- Complaint volume: For March 2017, debt collection was the most-complained-about financial product or service by consumers identifying as over the age of 62. Of the 2,169 older consumer complaints handled in March, there were 496 complaints about debt collection. The second most-complained-about consumer product was mortgages, which accounted for 486 complaints. Credit reporting was the third most-complained-about financial product or service, accounting for 326 complaints.
- Product trends: Complaints related to mortgages have accounted for 26 percent of all older consumer complaints submitted to the Bureau since 2011. This is 10 percentage points higher than the proportion of mortgage complaints from consumers under 62.
- State information: California, Florida, and Texas are the three states with the most complaints from older consumers, accounting for nearly one fourth of all complaints from older consumers since the Bureau began accepting complaints in July 2011.
The CFPB provides resources and tools for older consumers and their families at: https://www.consumerfinance.gov/educational-resources/resources-for-older-adults/
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established consumer complaint handling as an integral part of the CFPB’s work. The CFPB began accepting complaints as soon as it opened its doors in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans.
In June 2012, the CFPB launched its Consumer Complaint Database, which is the nation’s largest public collection of consumer financial complaints. When consumers submit a complaint they have the option to share publicly their explanation of what happened. For more individual-level complaint data and to read consumers’ experiences, visit the Consumer Complaint Database at: www.consumerfinance.gov/complaintdatabase/.
To submit a complaint, consumers can:
- Go online at www.consumerfinance.gov/complaint/
- Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
- Fax the CFPB at 1-855-237-2392
- Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244
- Additionally, through “Ask CFPB,” consumers can get clear, unbiased answers to their questions at consumerfinance.gov/askcfpb or by calling 1-855-411-CFPB (2372).
###The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.