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Credit card issuer complaints rose 20 percent in 2016

AmEx, Barclays PLC and Citibank topped last year's gripes list, CFPB data show

By  |  Published: May 24, 2017

Fred O. Williams
Senior Reporter
Expert on consumer credit laws and regulations

Description

Complaints about credit cards rose by 20 percent in 2016, according to data from the Consumer Financial Protection Bureau, coinciding with a surge of dissatisfaction with reward programs.

At the same time, complaints about credit cards shifted focus, with American Express topping the list of most complained-about card issuers last year, based on the size of its card business. Its rate of 45 complaints per $1 billion in consumer card balances jumped 78 percent from the previous year. In 2015, its complaint rate was the seventh lowest of the 10 largest card issuers. The company wouldn’t comment about the increase.

Store-card giant Synchrony Financial, which was the top complaint-getter in 2015 and 2014, fell to fourth place in 2016 as its complaint rate improved. Barclays PLC and Citibank came in second and third positions.

While the number of complaints is small compared to the size of the U.S. card business, which conducted about $3 trillion in purchases in 2016, they probably reflect only a small fraction of card users' dissatisfaction. That's because relatively few people know the CFPB exists, not to mention its complaint window.

In addition to credit cards, billing disputes, identity theft, fraud and closed accounts were also top sources of complaints. Credit cards were the first financial service the agency took complaints about when it opened its complaint window in 2011. Now cards are the fifth-largest source of complaints, after debt collection, credit reporting, mortgages and bank accounts or services, according to the agency's annual report.

How the CFPB handles complaints
People lodge a complaint with the bureau when they can't resolve a problem with the company directly. The CFPB verifies that the consumer is a customer of the company they are complaining about, and asks for the company's side of the story. At the end of the dispute process, the agency records whether the company paid a refund or other form of "relief," such as a correction of credit report data. Also recorded is whether the company's solution satisfied the customer, or not.

Card issuers differ widely in how often they resolve a complaint with a refund or other relief. Citi was most generous, issuing relief in nearly half of complaints. Chase was most tight-fisted, giving relief to just 18 percent of complaints.

The industry group American Bankers Association disputes the complaint data, saying that the substance of people's gripes is not verified by the CFPB. But companies issue a refund or other relief for one-third of complaints, indicating that they are taking responsibility for a significant share of the problems. Even if some complaints aren't justified, the totals should still indicate how well companies meet customer expectations.

Description

Data sources: CFPB, FFIEC

See related: Rewards cards draw a surge of complaints to CFPB, How to file a complaint about a credit card issuer

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Updated: 08-18-2017

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