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New Report: Older Consumers in the Financial Marketplace: An Analysis of Complaints, and Results, From the CFPB
Mortgages were the leading source of complaints to the Consumer Financial Protection Bureau from consumers 62 and over, followed by complaints about credit reports and debt collection, according to a new report by the Arizona PIRG Education Fund and the Frontier Group.
Diane E. Brown, Executive Director of Arizona PIRG, said that older consumers can make tempting targets for predatory behavior in the financial marketplace. Scammers may look to take advantage of the savings, home equity, or guaranteed income of older consumers. In addition, Brown said that consumers facing a savings shortfall may be harmed by low-balance or overdraft fees at banks, or be tempted to take on credit or use products such as reverse mortgages, whose risks may not be fully understood.
According to Arizona PIRG, legislation passed by the U.S. House and awaiting U.S. Senate action intended to cripple the CFPB could place older consumers at greater risk of harm from financial scammers. The bill, HR 10, would roll back the powers, funding and independence of the CFPB as well as weaken the Office for Older Americans.
Brown stated, “The Consumer Bureau has already taken a number of major enforcement actions against financial firms targeting older consumers. Gutting the CFPB would make it easier for financial scammers to threaten the homes and retirement savings of older consumers.”
Gideon Weissman of Frontier Group, a report co-author, added “Some predatory lenders cluster their storefronts around older consumer housing, putting their operations right in their path.”
Among the key findings of the Arizona PIRG Education Fund & Frontier Group report “Older Consumers in the Financial Marketplace: An Analysis of Complaints, and Results, From the CFPB”:
● Mortgages account for 31 percent of 72,000 complaints by older consumers. Other leading complaint categories were credit reporting (17 percent) and debt collection (17 percent). In Arizona, there were 1,920 complaints from older consumers, ranking our state 10th nationwide by total complaints.
● 80 percent of mortgage complaints concerned existing mortgages, with five percent of complaints about reverse mortgages -- loans solely available to older consumers that allow them to use their home equity as security.
● The CFPB has taken numerous enforcement actions against companies ranking high in complaints in the study:
o Mortgage complaint enforcement actions have been filed against three mortgage companies ranked in the top ten of the report’s finding, including Ocwen Loan Servicing, Nationstar Mortgage, and a company (Green Tree) that later merged with Ditech, which ranked sixth.
o The CFPB has taken actions against all three of the major consumer reporting agencies (credit bureaus) ranked by complaint volume (Equifax, Experian and TransUnion).
o The CFPB has taken actions against the top two debt collection companies ranked by complaint volume, Encore Capital Group and Portfolio Recovery Associates.
The report also includes excerpts from older consumer complaint narratives. Since the database began accepting these optional narrative stories, about half of complaints include them. Excerpts from Arizonans can be found at https://data.consumerfinance.gov/dataset/AZ-OlderAmericans/36mk-2693
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