Credit reporting agencies are getting under consumers’ skin: 75% of complaints made to the Consumer Financial Protection Bureau in 2022 had to do with credit or consumer reporting, according to its annual report released March 31.
The average volume of monthly complaints about credit and consumer reporting nearly doubled compared to the two previous years: about 48,300 complaints per month in 2022 versus 24,500 in 2020 and 2021. About 99% of the complaints in this category that were sent on to companies for review and subsequently closed with relief or explanation — roughly 575,000 total complaints — were about credit reporting, CFPB data shows.
The most common issue consumers had (38%) was incorrect information on their credit reports, according to the CFPB.
The CFPB, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, bears the responsibility of collecting consumer complaints. It analyzes and investigates those complaints, then sends them to companies for review and response. In 2022 it sent more than 820,000 of the nearly 1.3 million complaints to 3,200 companies. About 31% of the complaints didn’t merit action, the report found.
What problems do consumers have with credit reports?
Roughly 978,900 complaints were made about credit or consumer reporting in 2022, according to the CFPB. Approximately 89% of those complaints were made about the three largest credit reporting agencies: Equifax, Experian and TransUnion.
When complaining about inaccurate information on credit reports, consumers said there was often negative information, accounts that did not belong to them and credit inquiries they didn’t recognize. Having incorrect information on a credit report can present problems for consumers trying to find rental housing, even resulting in denial or increased rental costs, the CFPB said. Consumers also had difficulty placing or lifting a credit freeze.
In addition to finding incorrect information on their reports, consumers also had problems with improper use of their report (35%) and problems with a company’s investigation into an existing issue (25%).
What else are consumers making complaints about?
In 2022 the CFPB saw an uptick in complaint volume across financial products and services. The most significant increases from 2021 to 2022 were:
Credit or consumer reporting: +38%
Checking or savings accounts: +30%
Vehicle loan or lease: +16%
Money transfer or service, virtual currency: +4%
Only three areas received fewer complaints in 2022 compared to 2021:
The CFPB specifically called out certain grievances about checking and savings accounts; student loans; and money service fraud or scams.
Checking and savings accounts: Consumers more frequently reported issues managing an account, including account closures, fraudulent activity and problems with customer service.
Student loan complaints increased. The spike in student loan complaints from 2021 to 2022 was largely due to complaints about trouble with a lender or servicer, specifically confusion about forgiveness and repayment pause extensions. Federal student loans make up the vast majority of all student loans. Payments on those loans have been paused since March 2020, and last August President Joe Biden announced student loan forgiveness, the fate of which is now in the hands of the Supreme Court.
Money service fraud or scams complaints increased. Consumers reported phishing or smishing — phone and text message scams, respectively — schemes that tricked them into sending money. Those who engage with virtual currency also reported falling prey to scammers.
Per capita, the CFPB received the most complaints from Georgia residents, followed by Delaware, Florida, Washington, D.C., and Alabama. The state with the fewest complaints was South Dakota, followed by Idaho, Maine and West Virginia.