Majority of Complaints Received by Consumer Financial Protection Bureau Concern Credit Cards

Although last year's financial reform laws were supposed to make the terms and conditions of credit cards more transparent, many consumers are complaining about higher than expected interest rates and confusing terms.

In fact, a good portion of the complaints made about credit cards to agencies like the Consumer Financial Protection Bureau recently involved issues that were supposed to be addressed by the CARD Act. This bureau was created by provisions in the Dodd-Frank financial reform law. It serves as a control on financial services companies. Among the provisions in this act were greater clarity for the language of credit card agreements and a longer grace period for consumers to pay balances before they start to incur late fees.

Prior to the financial crisis, many American households had begun to rely more on credit card debt. In fact, an average American households' total revolving debt increased by 500% from 1988 to 2008. Fortunately, consumers appear to be using the cards less now, according to a report by the Federal Reserve.

The Consumer Financial Protection Bureau is getting its start by soliciting complaints about credit cards. About a quarter of the credit card complaints it has received are about interest rates and billing disputes. The companies that issued the credit cards were able to partially or fully resolve three quarters of these complaints.

The report also discussed the confusion surrounding credit card agreements. About a third of consumers stated that they fully understood their credit card terms. This report was the first one from the Consumer Financial Protection Bureau. After this agency gathers enough complaints, it wants to identify and then address consumer issues.

These issues could possibly include identity theft, which made up slightly more than one tenth of the complaints. It is hoped that the agency can eventually become an early warning system for trouble in the financial markets. As it gathers enough complaints from consumers, it will be able to alert the public of potential issues and scams.

Along with the issuing the report, the agency announced that it is gathering public feedback on its proposal for it to make a public database of complaints.

Share this website

Have a Question?
Get a Quick Answer

Debt Relief Options

Debt Settlement Calculator

Debt Settlement News