It’s no secret that many consumers are facing deep financial distress during the COVID-19 pandemic. Through September, only about half of the people who lost their jobs early in the pandemic had gone back to work. The $600 a week federal unemployment boost ended months ago. And critical policies like limits on debt collection and repossession have only been offered at the state level, leaving millions unprotected.
Data from the Consumer Financial Protection Bureau (CFPB) can shed some light on just which financial issues consumers have been most affected by during the pandemic, offering clues on what kinds of help American need to get through the coming months.
The CFPB’s Consumer Complaint Database, which contains nearly 2 million complaints about problems with financial products, gives consumers an option to publish the full story behind their complaint. These stories have personal information removed and are published as “consumer complaint narratives.”
To see which financial products consumers have been most affected by during the pandemic, I searched consumer complaint narratives from recent months for the following key terms: “coronavirus,” “CARES Act,” “COVID-19,” and “pandemic” (as well as common variations of those terms).1
An analysis of these complaints shows that the main financial problems consumers have faced during the pandemic relate to struggling to pay bills and fighting to obtain relief.
The Consumer Complaint Database organizes complaints by product (for example, credit card or auto loan), issue, and sub-issue. The top five issues for which the pandemic appears in consumer narratives all concern consumers’ struggles to pay their bills.
For example, in the “credit card” issue category “struggling to pay your bill,” 63% of consumer complaint narratives submitted from March through October mentioned the pandemic. And for the issues of struggling to pay for a mortgage, and struggling to pay for a vehicle, more than half of narratives mentioned the pandemic.
At the same time, 2020 has seen a sharp increase in the total number of complaints (including complaints without accompanying published narratives) for problems relating to difficulties paying credit card bills and auto loans -- increases of 57% and 17%, respectively, over 2019 levels.2 This may well be related to the fact that consumers have been given no federal pandemic relief, such as guaranteed access to forbearance or payment deferment, for auto loans or credit card debt.
Top 10 issues in CFPB complaint database ranked by percentage of consumer narratives mentioning the pandemic3
|Product||Issue||Narratives mentioning pandemic||Total narratives||Percentage of narratives mentioning pandemic|
|Credit card or prepaid card||Struggling to pay your bill||163||259||63%|
|Mortgage||Struggling to pay mortgage||740||1,436||52%|
|Vehicle loan or lease||Struggling to pay your loan||202||398||51%|
|Payday loan, title loan, or personal loan||Struggling to pay your loan||93||236||39%|
|Student loan||Struggling to repay your loan||80||247||32%|
|Mortgage||Incorrect information on your report||58||200||29%|
|Credit card or prepaid card||Fees or interest||332||1,208||27%|
|Credit card or prepaid card||Closing your account||192||790||24%|
|Credit card or prepaid card||Trouble using your card||119||507||23%|
|Payday loan, title loan, or personal loan||Problem when making payments||31||136||23%|
Grouping complaints by the Consumer Complaint Database’s sub-issue categories shows that consumers aren’t just struggling to pay their bills during the pandemic, they are also having problems getting the relief that they need.
In the sub-issue “denied request to lower payments” within the “vehicle loan or lease” product category, 67% of complaint narratives received since March mentioned the pandemic. Consumers reported similar problems finding relief paying for credit cards and student loans. More than 60% of complaint narratives mention the pandemic for the sub-issue categories of “credit card company won't work with you while you're going through financial hardship” and problems with student loans for “can't temporarily delay making payments.”
Top 10 sub-issues in CFPB complaint database ranked by percentage of consumer narratives mentioning the pandemic4
|Product||Issue||Sub-issue||Narratives mentioning pandemic||Total narratives||Percentage of narratives mentioning pandemic|
|Vehicle loan or lease||Struggling to pay your loan||Denied request to lower payments||144||216||67%|
|Credit card or prepaid card||Struggling to pay your bill||Credit card company won't work with you while you're going through financial hardship||156||243||64%|
|Student loan||Struggling to repay your loan||Can't temporarily delay making payments||40||66||61%|
|Vehicle loan or lease||Struggling to pay your loan||Lender trying to repossess or disable the vehicle||48||84||57%|
|Mortgage||Struggling to pay mortgage||N/A||740||1,436||52%|
|Payday loan, title loan, or personal loan||Struggling to pay your loan||N/A||93||236||39%|
|Student loan||Dealing with your lender or servicer||Problem with customer service||29||90||32%|
|Credit card or prepaid card||Fees or interest||Unexpected increase in interest rate||27||91||30%|
|Mortgage||Incorrect information on your report||N/A||58||200||29%|
|Credit card or prepaid card||Trouble using your card||Credit card company won't increase or decrease your credit limit||72||250||29%|
CFPB complaints suggest that as consumers continue to struggle under the burden of lost jobs and lost income caused by the COVID-19 pandemic, too often they are not getting the help they need.
It doesn’t have to be this way. Guaranteeing consumers access to forbearance for all types of debts, halting debt collection, and banning repossessions and evictions would go a long way toward helping people stay on their feet as the pandemic drags on. Consumers also need the CFPB to get back to cracking down on rulebreakers, rather than sitting on the sidelines.
Letting Americans sink deeper into debt or lose their homes or vehicles during this time of crisis would be absurd — and would also make America’s recovery far harder than it needs to be.
Photo credit: Madison Kaminski via Unsplash