COVID CFPB Consumer Complaint Bulletin

On May 21, 2020 the CFPB issued its Complaint Bulletin, which tracks the consumer complaints data as of May 11, 2020. This Bulletin focused primarily on the number of complaints containing the keyword COVID, coronavirus, pandemic, or CARES Act.

By the Numbers from the Bulletin:

29,000:                The average number of complaints the Bureau received each month in 2019.

36,700:                The Number of complaints received in March 2020.

42,500:                The number of complaints received in April 2020

143,609:              The total number of complaints received in 2020.

4,561:                  The number of complaints received in 2020 that contained a COVID-related keyword.

988:                      The number of complaints received in 2020 that were attributed to mortgage loans and that contained a COVID-related keyword.

581:                      The number of those 988 complaints where the reported issue was “Struggling to pay mortgage.”

Observations:

This should come as no surprise as COVID has impacted an unprecedented number of consumers who, because of income reduction or loss, indeed struggle to pay their mortgage. Additionally, this happened when dozens of mortgage lenders struggled to sell their loans they already committed to borrowers and when loan servicers were required in a matter of a few weeks to pivot their business-as-usual model to a pandemic model. Well-intended but hastily drafted laws and regulations coupled with unclear or conflicting state and local government edicts likely contributed to consumer confusion that resulted in unrealistic expectations about the meaning and benefits of forbearance and loss mitigation. 

Still, lenders and servicers know it is their obligation to navigate these requirements while reasonably setting consumer expectations. The industry will surely rise to the occasion. It is for these reasons a lender should establish solid consumer complaint controls including:

·        Creating controlled communication venues – website, email address, phone number - where consumers are invited to share their concerns and complaints with the company;

·        Identifying and monitoring the other venues where complaints could be recorded, such as emails to managers, Yelp, and FaceBook;

·        Establishing a centralized point to receive, log, assess, and respond to all consumer complaints in a timely and complete manner;

·        Staffing the right number of employees who possess the skill set and sensitivities necessary to handle consumer complaints; and,

·        Empowering a person or department to investigate the complaints in an objective, unbiased manner, while having the power to find and fix any root cause of systemic problems that caused the complaints.

Setting up a consumer complaint management program does nothing, though, if the lender struggles to truly commit to attending to the concerns of the consumer even if their claims are unfounded, to commit to change when a better process is warranted, and to humble itself when it finds it committed an error.

https://files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin_coronavirus-complaints.pdf

For more information, contact Raymond Snytsheuvel directly at (949) 683-7500 or raymond@garrishorn.com.