Credit cards make up 18% of coronavirus-related complaints the CFPB received from March through May, according to an analysis of the agency’s consumer complaints database.
It seems that getting such relief is not a slam dunk. Going by the complaints that consumers have submitted to the Consumer Financial Protection Bureau, there are issues in tapping into this relief.
One broad theme consumers bring up is that issuers are not implementing the terms of their deferment programs as they had advertised.
For instance, they may not be waiving interest, or they may be providing two months’ relief after promising three. Consumers also say that their account statements don’t show them participating in the relief programs, or that they are being charged late fees which had been waived during the deferral period.
Issuers not keeping their promises
In its complaint bulletin for July, the CFPB reports that consumers have submitted more than 187,000 complaints to it through May 2020, of which more than 8,000 directly mention coronavirus issues.
From March through May, complaints that cite credit cards made up 18% of coronavirus complaints received, with credit reporting issues making up another 18% of the coronavirus-based complaints.
According to one consumer’s narrative, for instance regarding a retail store credit card, the issuer “states they offer 90 days relief due to COVID-19, but will only defer 2 monthly payments. I spoke with [an] employee … who informed me there is nothing they can send me in writing outlining the terms of [the issuer’s] COVID-19 relief program, or that my 90 days relief had been used, that they could only send me another copy of my statement. The pandemic is still ongoing, hundreds of thousands of people are still out or work, and [the issuer] does not have anything in writing to provide their customers who theyre offering 90 days/3 months relief to, but in all actuality are providing 60 days and demanding the 3rd monthly payment.”
Ed Mierzwinski, senior director of U.S. Public Interest Research Group’s Federal Consumer Program, concurred that the advocacy group is seeing a lot of CFPB complaints about “credit card relief that’s promised but not delivered.”
“Even the big banks say they’re ‘working with,’ or ‘helping customers who need it,’ but their responses are simply not equal across the board,” Mierzwinski said. “They’re not treating all customers the same. Giving the banks the benefit of the doubt, presume that training on COVID-19 response has been inadequate or that frontline staff have been overwhelmed with inquiries or not given enough authority to help customers. That’s all typical of the big banks.”
And in an April 6 white paper, Rich Cordray, former CFPB director, advised the consumer agency on how to go about addressing the COVID crisis. He stressed that it should make sure financial institutions keep their promises to consumers.
“The CFPB should work with state and local officials to make sure that the promises lenders make — and consumers rely on — are being kept rather than becoming a frustrating game of bait and switch,” Cordray wrote. “Companies that deceive or mislead their customers are committing clear violations of both federal and state law.”
What to do if issuers promise but don’t perform
So how can consumers confront issuers about such lack of performance?
Jeremy Lark, senior manager of client services for GreenPath, a credit counseling firm, advises, “Agreement terms can vary. It is important for borrowers to take notes and keep careful records of any interactions they have with their card issuer and ask for written confirmation of agreements or any other type of assistance they receive. If an issue is spotted, we recommend following up directly with the card issuer to bring the matter to their attention and ask for them to deliver on what was promised.”
And Mierzwinski said, “If you’ve been promised relief, including fee waivers or skip-a-payments or any other relief you haven’t received, escalate your complaint.”
Other steps include:
- Keep a record of all your communications with the issuer
- Monitor your monthly statements, especially the first one after deferment begins, to ensure that the issuer is keeping its word
- Take screenshots of any online chats
- Keep a note of the names of specific staff you talked with, and when and what they promised you
- Have all this information handy if you contact the bank again
- Make it a point to mention that your issue relates to COVID-19
- Dispute any incorrect information reported to the credit agencies
- Take the issue to your state’s attorney general, or the CFPB
If you make a CFPB complaint, a company is required to respond to you and let the agency know how it handled the issue. So a bank will be forced to take a second look at your issue.
According to the CFPB, based on issuer responses to consumer complaints, some of them have updated their systems to “recognize new workout options,” while others “assured the consumer that they are enrolled in a deferment program but monthly statements will continue to show a balance due.”
Try different communication tools to talk to issuers
Responding to a query about how Discover is handling such issues, Dennis Michel, Discover’s senior vice president of card operations, said, “Discover is working with each customer who contacts us to provide the best payment program to meet their needs. Customers also have the ability to re-enroll if their hardship continues.”
What if your account statement doesn’t show you as enrolled in a relief program? Michel advises consumers to visit Discover’s website for questions about their status or if they haven’t seen confirmation of enrollment.
“Cardmembers can also contact us through our mobile text app, which connects a customer directly with an agent,” he added.
US Bank – as well as banking industry trade associations Consumer Bankers Association and American Bankers Association – did not respond to inquiries seeking comment on these matters. And a Bank of America spokesperson merely stated that “we continue to have flexibility to help clients through the current environment.”
And if you find it difficult to reach a bank representative on the phone, contact the bank through web chats or email.
Providing input to bank customers, the Federal Deposit Insurance Corp. advises, “Some bank branches heavily impacted by COVID-19 may have limited personnel in place to respond to calls and some may need to temporarily close to protect their employees.”
Relief is not automatic
Don’t assume you will get relief automatically, as it seems some consumers have. You will have to contact your issuer to proactively seek out the relief.
According to the FDIC, it is encouraging banks to be understanding and work with customers seriously impacted by COVID-19-related developments, including business slowdowns, shutdowns or sickness. In certain situations, the FDIC is even encouraging banks to let customers miss loan payments without negative consequences for the borrower, extend their loan terms, and modify loans. The FDIC advises consumers, “However, before skipping payments or otherwise operating in a manner that differs from the terms of a loan, contact your bank to determine its flexibility during this time.”
GreenPath has also heard that some consumers were confused by the relief they were provided or did not understand the terms.
“It’s crucial that borrowers fully understand the details of any arrangements they make with their creditors before agreeing,” Lark said. “This better prepares the borrower to make a plan for how to handle the debt when the deferment period ends.”
What to know if you request relief
If you ask your issuer for help, you should be aware of how the creditor will report to the credit bureau; if it will continue to charge interest during the deferment period; and how it will deal with the paused payments at the end of the deferment period.