Dec. 2, 2011 at 6:32 AM ET
Given a chance to complain, credit card consumers jumped at the opportunity.
The Consumer Financial Protection Bureau opened for business earlier this year, and its first actions were to solicit consumer complaints about credit cards and set up a system for resolving disputes. In three months ending Oct. 21, cardholders filed more than 5,000 complaints andrequests for help.
An interim report issued this week offers insight into the bank practices that most bug consumers: Billing disputes, collection practices, and debt protection sales pitches. Surprisingly, late fees did not crack the top 10.
Mysterious fine print is a common thread through many of the complaints.
"The biggest thing we see is consumer confusion," said bureau spokeswoman Jennifer Howard. "Customers and credit card issuers aren't always on same page when it comes to understanding the terms of the deal."
According to the report, account holders struggle to understand both terms of their contracts and details of additional offers like debt protection. There's a "mismatch between consumer expectations and the way the product functions," the report says.
A big part of the bureau's mandate is to act as an express route for resolution of consumer issues. Of the 5,000-odd complaints submitted, 4,254 were forwarded to the bank involved; banks said they'd resolved 3,151 of those. Consumers disagreed about that satisfaction rate, with only 2,238 agreeing that their dispute had been solved. Another 500 said their complaints were pending.
The text of the complaints is not public, but the bureau is working on a method for providing "public reports" that will include "certain aspects of credit card complaint data."
Meanwhile, the bureau will soon begin accepting complaints about other financial products, such as mortgages and home equity loans.
“When consumers contact us, we get a snapshot of how the consumer finance markets are working,” said Raj Date, a special adviser to the secretary of the Treasury for the Consumer Financial Protection Bureau. "We will continue to work with consumers, credit card companies, government agencies, and others to improve consumer education and ensure CFPB’s regulation, supervision, and enforcement efforts are effective.”
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