Often required to move at a moment’s notice, work temporarily away from their families, or endure long deployments to another country, U.S. servicemembers face many extra challenges in regard to their financial well-being as they try to keep up with their financial security— many times from afar.
Because of these unique challenges, regulators and government agencies like the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), and Department of Defense (DOD) have committed to educating and protecting servicemembers by taking action against financial institutions that harm these consumers.
In our 2020 Financial Services Consumer Complaints Report, we took a look at how regulators are protecting this group, analyzed servicemember complaint trends, and what this means for financial institutions in their compliance initiatives.
Regulators have taken extensive measures to provide servicemembers with increased information, resources, and protection, such as:
- Educating and empowering military consumers with information to help them make better-informed decisions regarding consumer financial products and services
- Monitoring complaints made by servicemembers and their families, and the responses to those complaints, through the CFPB database or other appropriate Federal or State agency
- Coordinating efforts among Federal and State agencies, as appropriate, regarding consumer protection measures relating to consumer financial products and services offered to, or used by, servicemembers and their families
In 2019, the FTC received almost 32,000 complaints from military consumers, including all active-duty servicemembers, veterans, and military retirees, plus families and Reservists)—a steep increase of 81% from 2016.
But, for the first time, military complaints have decreased from 2018 to 2019 by 8%, possibly signaling that the regulators’ efforts have been effective and that financial services companies are becoming more sensitive to these groups.
What does this mean for Financial Institutions?
An overall decrease in complaints is an excellent sign that our military members are being protected more now than ever. But, this doesn’t mean that regulators have laxed their scrutiny on financial institutions that have servicemembers as customers.
Most recently, the CFPB has wrapped up a series of nine enforcement actions against companies who sent deceptive advertisements to servicemembers and veterans, totaling over $4 million in penalties. The Bureau’s response “reflects its commitment to enforcing the laws to ensure the financial marketplace is fair and accurate for all consumers, including servicemembers, veterans, and surviving spouses.”
Just as veterans and servicemembers have and continue to protect our country, financial institutions and companies alike must remain diligent in monitoring complaints and resolving them in a timely manner to protect these vulnerable consumers.
Not only does this help protect servicemembers, but it will help organizations avoid costly enforcement actions and damaged reputations. For more insights on consumer complaints submitted by servicemembers and veterans, download our free 2020 Consumer Complaint Report.