Pub. 8 2018 Issue 3

11 ISSUE 3. 2018 T HE BUREAU OF CONSUMER FINANCIAL PROTECTION (CFPB) ROUTINELY PUBLISHES REPORTS BREAKING DOWN COMPLAINTS IT RECEIVES. IN A REPORT PUBLISHED MAY 31, 2018 ENTITLED, “COMPLAINT SNAPSHOT: DEBT COLLECTION (THE REPORT), THE CFPB DISCUSSED THE AVERAGE NUMBER OF COMPLAINTS RECEIVED FROM JANUARY 1, 2018 THROUGH MARCH 31, 2018, AND COMPARED THOSE NUMBERS TO THE SAME TIME PERIOD IN 2017. THE REPORT PROVIDED AN OVERVIEW OF COMPLAINTS THE CFPB RECEIVES, AS WELL AS AN ADDITIONAL SECTION FOCUSING ON COMPLAINTS REGARDING DEBT COLLECTION PRACTICES. AN INTERESTING TREND WAS THE SIGNIFICANT INCREASE IN THE NUMBER OF COMPLAINTS IN THE AREAS OF “MONEY TRANSFERS OR SERVICE, VIRTUAL CURRENCY” AND “CREDIT OR CONSUMER REPORTING,” WHICH HAVE MORE THAN DOUBLED IN THE PAST YEAR. Reviewing the CFPB’s Recent Complaint Report By Zack Smith, Associate General Counsel The categories with the most com- plaints—representing approximately 74% of the total complaints in March 2018—were: “Credit or consumer re- porting,” “Debt collection,” and “Mort- gage.” “Credit or consumer reporting” complaints made up approximately 37%, “Debt collection” complaints made up approximately 27% and “Mortgage” made up approximately 10% of the total complaints for March 2018. These three categories combined to make up a ma- jority (69%) of the total complaints since the Bureau began receiving complaints. In a comparison between the first quarters of 2017 and 2018, the “Money transfers or service, virtual currency” complaint-category increased by 184%— from an average of 352 complaints to 1,000 complaints. The Bureau also noted a majority of those complaints arose from issues with the availability of funds from virtual currency exchanges. In 2017, virtual currency (cryptocurrency) became a popular investment, and the leading currency was Bitcoin. Investors used virtual currency exchanges to pur- chase cryptocurrency, which, as with the development of all technology, experi- enced difficulties. The spike in com - plaints coincided with the drop in price of Bitcoin in January 2018 as investors sought to sell and withdraw their funds. The second most significant increase from the first quarter 2017 to 2018 involved the average number of com- plaints regarding “Credit or consumer reporting,” which increased 129% from an average of 4,848 complaints to 11,107 complaints. The Bureau attributed this increase in the average to improvements made to the complaint submission pro- cess in April 2017. Since there are three more days in March than February, the amount of complaints was expected to increase slightly from February, which is what occurred with a 7% increase in complaints in March. Notably, “Prepaid card” complaints increased 21% and “Debt collection” complaints increased 14% in March.