Consumer complaints and inquiries about loans, questionable investments and other financial concerns have skyrocketed since the onset of Covid-19, according to two separate reports.
The California Department of Business Oversight said it had experienced an increase of more than 40% in consumer contacts. The department said that from March 1 through the end of June, consumer complaints increased more than 37% to an average of 588 per month. E-mail inquiries jumped 86% to almost 2,400 per month. And consumer calls climbed 22% to more than 3,100 per month.
The California department said consumers reached out with questions about how the pandemic is affecting mortgages, student loans and personal loans. The callers were also concerned about questionable investments and apparent fraudulent schemes.
Separately, the site LendEDU studied the complaint database at the Consumer Financial Protection Bureau and found there were 140,042 consumer complaints filed between March and July 17. That represented a 44% increase year over year.
The analysis found that most of the increase in complaints (84%) was attributable to credit reporting, credit repair services or other personal consumer reports. There was a 77% increase in the number of complaints about money transfers, virtual currency or money service, and there was a 29% increase in the number of complaints related to credit cards or prepaid cards.
The data also showed a 41% decrease in the number of complaints related to student loans. The report noted that with the pandemic forbearance placed on student loans, borrowers may have put their student loan debt on the back burner.
LendEDU found a dramatic uptick in year-over-year complaints about the sub-product “government benefit card,” which saw a 506% complaint increase. There also was a 1,790% year-over-year increase in complaints under the heading “problem getting a card or closing an account” under sub-product.
The report said this was most likely caused by government stimulus checks in response to the coronavirus. It was widely reported that some people had problems accessing the stimulus debit cards that were issued to them because the names printed on them were incorrect.
As for the uptick at the Department of Business Oversight in California, Commissioner Manuel Alvarez said in a statement that predatory financial products and services proliferate in an economic crisis. “The DBO is stepping up its consumer protection efforts, but the public also should be vigilant and extra careful during this historic pandemic.”
Consumers can reach the department at (866) 275-2677 or [email protected].
The Department of Business Oversight licenses and regulates financial services, including state-chartered banks and credit unions, student loan servicers, money transmitters, securities broker-dealers, investment advisors, non-bank installment lenders, payday lenders, mortgage lenders and servicers, escrow companies, franchisors, Property Assessed Clean Energy (PACE) program administrators and more.