Complaints sent to new federal database paint a nationwide mosaic of misery, and the complainingest people tend to have comfortably high incomes
Credit cards are everywhere, and so is the grumbling about them. A detailed look at about 15,000 complaints sent to federal regulators in 2012 reveals a nationwide mosaic of misery over fees, billing disputes and 30 other kinds of gripes.
CreditCards.com analyzed and mapped the first full year of data in the new database set up by the Consumer Financial Protection Bureau, covering 2012. The information reveals clusters of complaints pointing to local hot zones of credit card problems, such as spates of identity theft. Most ZIP code areas in the U.S. filed few or no complaints, but 30 neighborhoods had concentrations of 10 or more. Unhappy neighborhoods are each unhappy in their own way — but the very unhappiest tend to have comfortably high incomes, and they tend to bunch up along the coasts. (Story continues below.)
“The more income there is, the more likely you are to have complaints,” said James Miller, director of banking practice at J.D. Power, which studies cardholder satisfaction. “But they’re also the customers that are using their cards a lot more … so the odds of something going wrong goes up.”
The picture of complaints comes from a new trove of information from the Consumer Financial Protection Bureau. The agency began publishing credit card complaints on its website — minus people’s names and street addresses — in mid-2012. The list of complaints goes back to late 2011, so the first full year of data was complete in late 2012. Complaints are added to the list after the company targeted by a complaint verifies that the source of the gripe is its customer.
Credit complaints chronicle
A new trove of federal complaint data paints a detailed picture of the friction points between big U.S. credit card issuers and their cardholders. A CreditCards.com analysis of the newly available data shows which companies draw the most complaints, what’s complained about most and where the complaints are coming from.
Boca Raton, Fla., gripes most
A neighborhood in Boca Raton, Fla., grumbled the loudest with 44 complaints in 2012, even though its population of 21,000 is on the low end for urban ZIPs and has a comfortable median household income of $75,000. Most complaints nationally are about billing disputes, but that wasn’t the issue in ZIP code 33496, whose palm tree-lined streets pass the Polo Club of Boca Raton and the St. Andrews Country Club.
Most of their complaints were about identity theft and fraud — a spike that was far out of proportion to the usual rate.
“We do have a number of incidents of that (identity theft) type,” said Mark Economou, public information manager for the Boca Raton Police Department, speaking about the area in general. In one example, he said, the department arrested a McDonald’s worker for skimming credit card numbers of drive-through customers.
According to the Federal Trade Commission, Florida as a whole leads the states in identity theft problems. The CFPB data showed that complaints about the issue were high in other parts of Florida, including a cluster in a West Palm Beach neighborhood 20 miles to the north.
The Boca Raton neighborhood’s record grousing was almost double the next-hottest zone, ZIP code 10024 on Manhattan’s West Side, where residents zinged out 25 complaints on a range of issues. The third-unhappiest ZIP code was right next door in 10023 — a near twin demographically, with a high population of about 60,000 and healthy median household income above $70,000.
Other regions display more puzzling outbreaks. An Austin, Texas, neighborhood sent in 10 complaints about credit reporting problems, several times the usual rate. Card companies report defaults to credit bureaus, which can be a source of friction with cardholders. And of 15 complaints from Resada, Calif., north of Los Angeles, six were about late fees, the source of relatively few complaints nationally.
Such clusters could be pure chance, or the result of local media reports that raise people’s awareness about a specific problem — but are they something investigators should check out? The consumer bureau said it keeps an eye out for complaints that should be investigated, but does not go into detail about its efforts until it announces an enforcement action. The agency publishes the complaint data on its website so that people and analysts can look at it for themselves, a spokeswoman said.
The neighborhood numbers may be a barometer for bigger problems. Nationwide, 11 percent of cardholders had some problem with their card in 2012, according J.D. Power’s annual card satisfaction survey. That works out to more than 15 million people — so the 15,000 complaints filed with the federal regulator are just a sample of the discontent that’s out there. Most people gripe to their card issuer directly, and some just stew over an issue they don’t think they can change, Miller said.
For all the grousing in 2012, it could have been worse, he said. “Card issuers have done a good job of reducing complaints in the last couple of years.” These days, many problems stem from issues that aren’t the card company’s doing, such as disputes with a merchant where the card company winds up in the middle; or fraud-identity theft. Fortunately, these complaints often end on an upbeat note, Miller said. As harrowing as identity theft problems can be, most of them wind up leaving the cardholder more satisfied after the card issuer clears up the problem and cancels any bogus charges.
Why should wealthy areas generate more complaints? Actually when you look at satisfaction demographically, the lowest income group, under $25,000, also has a relatively high complaint rate, Miller said. But it’s people with over $200,000 in income that are most likely to have issues. Then again, they use their cards an average of 23 times a month, compared to 13 times for people in the $50,000 to $100,000 bracket.
“In general we see customers who are more affluent have higher expectations in how they’re treated,” Miller said.