July 22, 2014

CFPB accepting prepaid card complaints

July 23, 2014 – CFPB will now accept consumer complaints about problems with prepaid cards and other nonbank products, including debt settlement and credit repair services, and pawn and title loans.

Prepaid cards may include any reloadable cards, as well as gift and benefit cards. CFPB is inviting complaints about problems managing, opening or closing prepaid card accounts, as well as scams, incorrect or unexpected fees, overdraft issues and other problems. The bureau invites complaints about similar issues – including fraud, unexpected charges or interest fees – related to debt settlement and credit repair services and pawn and title loans, as well.

Last week, the bureau announced a proposal to allow consumers to air more detailed complaints about financial products and services in the public Consumer Complaint Database – meaning the narrative of the complaint would be made public while the consumer remained anonymous. NAFCU is concerned about potential impact on credit unions' reputational risk from the inclusion of unverified complaints in a public database.

After CFPB's announcement, The Hillnoted the response from NAFCU Director of Regulatory Affairs Mike Coleman, who said in a statement:

Mike Coleman

"NAFCU reiterates its concerns surrounding the Consumer Complaint Database and the potential for great reputational harm stemming from unverified consumer complaints. Before the CFPB chooses to expand the content of subjects included in the database or pursue its narratives proposal issued last week, it should look to ensure that proper safety controls are in place to protect credit unions and other financial institutions from unsubstantiated claims. Credit unions already have robust procedures in place to address member complaints and take great care to address their members' complaints directly to foster an ongoing relationship."

The database now has anonymous information about the complaint received, such as the consumer's zip code. The bureau said it would offer companies the chance to have their responses published concurrently with the narrative complaints under the new proposal.