Oklahoma consumers have few complaints about credit cards
BY CASEY SMITH World Staff Writer
Thursday, November 22, 2012
11/22/12 at 7:22 AM
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A national database of credit card complaints shows that consumers in Oklahoma are relatively happy, while those nationwide are concerned about billing disputes, a Tulsa World analysis shows.
The World analyzed 14,270 complaints submitted to the U.S. Consumer Financial Protection Bureau, the country's first federal agency solely focused on protecting consumers' pocketbooks.
The bureau received 14,270 publishable credit card complaints from consumers nationwide between Dec. 1, 2011, and Nov. 8, the World's analysis shows. The federal agency began taking credit card complaints from the public in July 2011 and made the database public June 19.
Oklahoma had nearly 2.6 complaints per 100,000 residents, one of the lowest rates in the nation. The highest complaint rate came from ZIP codes in the District of Columbia, about 13 complaints per 100,000 residents.
Complaints are included in the public database after the credit card company responds or after 15 calendar days have passed, whichever comes first. The bureau focuses on complaints where the company fails to respond in time or where the consumer disputes the response.
Almost 75 complaints did not get a timely response, and consumers disputed roughly 2,770 responses, data show.
Billing disputes were the most common issue consumers identified in complaints. Roughly 2,100 complaints were placed in this category.
Consumers submitting complaints decide how to categorize their issues, said Scott Pluta, assistant director for the Consumer Response Team. The responses help staff learn what products and services consumers understand and areas in which consumers need education, the bureau says.
Citizens submitted about 1,640 complaints regarding annual percentage or interest rates. Also among the top complaints: issues regarding identity theft, fraud or embezzlement; credit reporting; and closing or canceling an account.
Company responses currently fall into four categories: closed with explanation, closed with monetary relief, closed with nonmonetary relief and closed.
Data show companies closed roughly 4,110 cases with explanation, 2,070 with monetary relief, 990 with nonmonetary relief and almost 120 complaints without relief or explanation. Other cases fell into categories no longer used by the bureau.
Customers of 67 credit card issuers submitted complaints, data show.
When a consumer submits a credit card complaint, it does not necessarily mean the company named has done anything wrong, Pluta said.
The system helps consumers resolve complaints and communicate with card issuers. If an issue is not resolved, the bureau can investigate whether the company violated the law.
Most consumers who file complaints raised issues with companies first, Pluta said.
"What we find in the vast majority of cases is that the consumer has already contacted the company and their issue hasn't been resolved," he said.
In many cases, consumers who don't get the outcome they're looking for at least walk away feeling they have been heard by the company's regulator, he said.
Capital One customers submitted more complaints than customers of any other credit card issuer - roughly 3,100 complaints.
But counting the number of complaints without considering the number of customers a card issuer has is not an accurate gauge of customer service, Capitol One spokeswoman Tatiana Stead said.
Capitol One is also the second-largest card issuer in terms of total accounts, according to one industry tabulation of MasterCard and Visa general purpose credit card accounts, she said.
Also, the complaint data attribute complaints involving HSBC cards to Capital One, which purchased HSBC's U.S. card business May 1, Stead said.
Capital One is well inside the range experienced by the largest banks when complaints are measured on a per account basis for the combined portfolios, Stead said.
Citibank and Bank of America customers filed the second- and third-highest number of complaints. Citibank customers filed roughly 2,520 complaints. Citibank did not respond to requests for comment.
Bank of America customers filed roughly 1,960 complaints. Bank of America had no comment.
Customers of the three companies complained about the five issues most frequently cited overall, in varying order.
The public complaints database is unfair to credit card issuers and misleads consumers because the data are unverified and not normalized, said Nessa Feddis, vice president and senior counsel with the American Bankers Association.
"They're relying on data they admit is unverified and therefore unreliable," Feddis said. "That will mislead consumers, contrary to their mission."
The database artificially inflates complaints against companies because many issues are disputes between consumers and merchants, Feddis said.
However, Pluta said making the database public is helpful to issuers and consumers.
The bureau does verify complaint data in the sense that it removes duplicates, ensures that complaints are within its jurisdiction, makes sure complaints are complete and verifies a commercial relationship between the consumers and companies, he said. Releasing data to the public has the potential to affect the development of new products in a positive way, Pluta said.
The data may help companies consider the extent to which new products or services cause consumer harm or confusion, he said. Consumers will also be able to use the data to compare customer service among credit card issuers, he said.
The bureau does not make value judgments on responses falling under the four categories, he said.
"Based on what we've seen, all credit card issuers face roughly the same distribution of complaint types, so no one company should be at a disadvantage," Pluta said.
How the complaint process works
The Dodd-Frank Wall Street Reform and Consumer Protection Act created the U.S. Consumer Financial Protection Bureau in 2010.
The bureau takes complaints from consumers who are dissatisfied or suspect wrongful conduct by an entity related to a financial product or service.
Employees confirm that a commercial relationship exists between consumers and companies named in complaints but do not verify the accuracy of all facts the consumer alleges.
Complaints are included in the public database after the company responds or after 15 calendar days have passed, whichever comes first.
The bureau's Consumer Response Team sends screened consumer complaints to companies, which review the information, communicate with consumers as appropriate and determine what actions to take. Companies then report responses to consumers and the bureau. Consumers can dispute responses.
Source: U.S. Consumer Financial Protection Bureau
Original Print Headline: Credit complaints analyzed
Casey Smith 918-732-8106