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CFPB Monthly Complaint Snapshot Examines Money Transfer Complaints
Wednesday, December 23, 2015 6:50 AM

On Tuesday, the Consumer Financial Protection Bureau released its latest monthly consumer complaint snapshot. The report shows that consumers’ complaints about money transfers center around trouble safely and efficiently sending money, and complaints about being victims of fraud.

View the Monthly Complaint Report.

Product Spotlight: Money Transfer

Every year, people send tens of billions of dollars through money transfer services. Consumers send funds both abroad and domestically in order to make payments, and to help family and friends pay for important needs such as school fees, rent for elderly relatives, and other necessary living expenses. As of Dec. 1, 2015, the Bureau had handled approximately 5,100 money transfer complaints, which include both domestic and international transfers. Some of the findings in the snapshot include:

  • Consumers victimized by fraud: Of all complaints about money transfers, 42 percent of them involved consumers complaining about being victims of fraud. A common fraud tactic mentioned by consumers involves the fraud perpetrator asking for a money transfer in order to provide relief to a family member in need. While this is the most common type of money transfer complaint, it is not targeted at the actual money transfer service being provided.    
     
  • Problems transferring money: Consumers complain about problems arising when they try to complete a money transfer. Some consumers complained that the amount of money transmitted was smaller than expected, while others mentioned the money they sent being significantly and unexpectedly delayed.     
     
  • Lack of adequate customer service: Many complaints about money transfers centered around problems consumers faced when they contacted the company for help. People complained about long hold times when attempting to speak to a representative, and that when they did manage to get through to someone, they were provided confusing or inadequate information. Other consumers said when they called they were simply unable to speak to anyone from the company.
     
  • Issues resolving errors: Consumers complain that refunds on money transfers are often subject to long delays and that their rights in resolving an error are not made clear by the company they are working with.
     
  • Most-complained-about companies: MoneyGram, Western Union, PayPal, and JPMorgan Chase were the four companies about which the CFPB has received the most money transfer complaints. Between July 2015 and September 2015, the four companies accounted for 80 percent of all money transfer complaints. Company-level information should be considered in the context of company size and activity in the relevant market. 

Company-level complaint data in the report uses a three-month rolling average of complaints sent by the Bureau to companies for response. This data lags other complaint data in this report by two months to reflect that companies are expected to close all but the most complicated complaints within 60 days. After the CFPB forwards a company the complaint, the company has 15 days to respond, confirming a commercial relationship with the consumer.

National Complaint Overview

As of Dec. 1, 2015, the CFPB has handled 770,100 complaints nationally. Some of the highlights from the statistics in this month’s snapshot report include:

  • Complaint volume: For November 2015, the two most-complained-about financial products were debt collection and mortgages, representing nearly half—49 percent—of complaints submitted. Overall, the CFPB saw a 12 percent decrease in complaint volume between October 2015 and November 2015.
     
  • Product trends: In a year-to-year comparison examining the time periods of September to November, complaints about prepaid products rose 215 percent. Between Sep. 1 and Nov. 31, the CFPB received 442 complaints about prepaid products. Payday loan complaints showed the greatest decrease—14 percent—during the same time period.
     
  • Most-complained-about companies: The top three companies about which the CFPB received the most complaints between July and September of 2015 were Equifax, TransUnion, and Experian.