If you are an auto lender, it’s worth keeping your eye on the complaints consumers lodge with the Consumer Financial Protection Bureau (CFPB), even if your company does not participate in the CFPB’s complaint portal.
CFPB leveraging consumer complaints
For those unfamiliar, the CFPB’s Office of Consumer Response administers a statutorily-mandated portal to collect, investigate and respond to consumer complaints. The CFPB uses these complaints to identify bad corporate actors, track emerging consumer protection problems, and to prioritize the use of its regulatory, supervisory, and enforcement tools. When I worked in the CFPB’s Office of Supervision Policy, I remember actively using consumer complaints to inform exam topics and prioritization.
The complaints the CFPB gets are no secret. The CFPB has opened up its complaint database for anybody – companies, consumers, class action litigators – to analyze, slice, and dice. The database contains over six million complaints, 1.6 million of which were filed by consumers in 2023.
These complaints offer a valuable form of compliance intelligence. They can give advance warning of the CFPB’s upcoming oversight targets and priorities. It’s notable, for example, that consumer complaints about managing an auto loan or lease in 2023 spiked by 77%, and that CFPB supervisory highlights have recently focused on end-of-loan problems like GAP refunds and failing to automatically debit final payments.
Complaints also provide free market feedback from consumers about business practices that bother them.
Auto finance industry complaints
So, here’s a recent snapshot of what’s going on in auto.
Consumers filed 2,821 consumer complaints in the “vehicle loan or lease category” between June 1st, 2024 and September 1st, 2024.
Consumers identified the following issues and sub-issues in their complaints:
- Managing the loan or lease (854)
- Repossessions (623)
- Getting a loan or lease (425)
- Loan open without my consent or knowledge (128)
- Credit denial (107)
- Confusing or misleading advertising or marketing (93)
- Changes in terms mid-deal or after closing (33)
- High-pressure sales tactics (24)
- Problems with additional add-on products or service purchased with the loan (14)
- Problems at the end of the loan or lease (403)
- Incorrect Information on the Consumer’s report (224)
- Struggling to pay loan (78)
- Problem with company’s investigation (62)
My Takeaways
- Consumer’s are directing their ire elsewhere: During the same three month period I looked at vehicle complaints, consumers filed over 578,000 complaints with the CFPB about their credit reports, 33,000 about debt collection and 11,000 about their savings accounts.
- Most auto complaints relate to servicing and when loans go bad: Only 15% of consumer auto complaints relate to getting a loan. Most consumer complaints during this period related to servicing (approximately 28%) and problems at the end of loan or lease, including repossessions (approximately 36%).
- Consumers don’t seem to be complaining about the terms of their auto loans or aftermarket products: In reviewing complaint narratives, I saw very few consumers criticizing the substance of their loans or the after-market products they owned. Rather, complaints often related to getting unwanted products, poor customer service, or charges they didn’t think they owed.
- Fraud is an issue consumers raise in auto and in nearly every credit category.
Those are my observations. But the great aspect of the CFPB complaint portal is that you don’t have to take my word for it. Go check for yourself!
