WASHINGTON–Older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred interest credit cards, and charges for unauthorized add-on products, according to the most recent monthly complaint “snapshot” released by the Consumer Financial Protection Bureau.
The snapshot provides an overview and analysis of more than 103,100 complaints submitted to the Bureau by consumers voluntarily reporting their age as 62 or older.
“Older consumers who may be on a fixed income are at a greater risk for financial trouble if they encounter problems with financial products or services,” said CFPB Director Richard Cordray. “The complaints submitted by older consumers are important for the Bureau to ensure we are properly looking out for this segment of the population.”
The CFPB noted that more than 10,000 Americans turn 62 every day and are one of the fastest growing consumer groups in the marketplace. “While older consumers are living longer and healthier lives than ever before, a growing number of older consumers face financial exploitation, struggles with debt, and entering retirement with limited savings,” the CFPB said.
Among the findings in its most recent snapshot:
- Servicing problems with reverse mortgages. Older consumers with reverse mortgages seeking to stay in their house following the death of the borrowing spouse report servicing problems that sometimes result in foreclosure proceedings. A 2015 report published by the Bureau examines consumer frustrations surrounding reverse mortgages.
- Difficulty recovering from financial scams: Older consumers are often the target of financial scams and identity theft. Older consumers working to recover from scams or exploitation have complained about difficulty with correcting credit reports, disputing charges with credit card companies, and attempting to regain money that was withdrawn from their bank accounts.
- Confusion about deferred interest and zero interest credit card offers: Some older consumers on fixed incomes use credit cards to pay for unanticipated large expenses, such as medical needs. Consumers complain about confusion understanding credit card terms and conditions, the CFPB said. One particular example highlighted in the report are complaints from older consumers about struggles to understand the distinction between deferred interest and zero interest offers.
- Fees charged for unwanted add-on products and services: Some older consumers complain about being charged for items such as credit monitoring services they did not sign up for. Some of these consumers also complained that they were enrolled in these types of programs without proper disclosure of the program and its costs.
Older Consumer Complaint Trends and Statistics
Of the 1,163,200 complaints the Bureau has handled since it began accepting complaints in July 2011, 54% of consumers have voluntarily reported their age. Of those, over 103,000 have come from consumers who report that they are 62 years old or older. Below is a breakdown of those complaints along category and state lines:
- Complaint volume: For March 2017, debt collection was the most-complained-about financial product or service by consumers identifying as over the age of 62. Of the 2,169 older consumer complaints handled in March, there were 496 complaints about debt collection. The second most-complained-about consumer product was mortgages, which accounted for 486 complaints. Credit reporting was the third most-complained-about financial product or service, accounting for 326 complaints.
- Product trends: Complaints related to mortgages have accounted for 26% of all older consumer complaints submitted to the Bureau since 2011. This is 10 percentage points higher than the proportion of mortgage complaints from consumers under 62.
- State information: California, Florida, and Texas are the three states with the most complaints from older consumers, accounting for nearly one fourth of all complaints from older consumers since the Bureau began accepting complaints in July 2011.
The Monthly Complaint Report can be found at: http://files.consumerfinance.gov/f/documents/201705_cfpb_Monthly_Complaint_Report.pdf