Since 2015, there has been a 104% increase in the number of deceptive marketing and advertising complaints in the Consumer Financial Protection Bureau (CFPB)’s Consumer Complaint Database. There is one group that seems to be disproportionately affected by these deceptive marketing and advertising messages – servicemembers, veterans, and their families – as they are more apt to face unique challenges in their daily lives. From 2016 to 2019, the number of complaints submitted by servicemembers increased by 170%.
Often required to move at a moment’s notice, work temporarily away from their families, or be deployed to another country, U.S. servicemembers face many extra challenges in regards to their financial well-being and financial security.
According to the CFPB’s 2019 Office of Servicemember Affairs (OSA) Annual Report, the Bureau has 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 by servicemembers and their families, and the responses to those complaints, by the Bureau or other appropriate Federal or State agencies
- 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 CFPB received 26,895 complaints from military consumers, monitored by both the Bureau’s Office of Consumer Response and the Office of Servicemember Affairs.
COMPLAINTS SUBMITTED BY SERVICEMEMBERS
The Bureau’s OSA analyzes and reviews ongoing and emerging financial issues relevant to military consumers in order to develop educational factsheets, pamphlets, and supporting documentation to provide accurate and timely information.
Some of the key financial topics that the OSA has highlighted over the past year in educational materials offered include the Servicemembers Civil Relief Act (SCRA), the Military Lending Act (MLA), the financial well-being of veterans, VA mortgage lending, foreclosure protections, medical debt, and credit reporting/monitoring for military consumers.
What does this mean for Financial Institutions?
The Bureau has made it clear that they utilize consumer complaints to drive their enforcement actions, and they specifically look at complaints by “special groups” who are particularly vulnerable (i.e. servicemembers and older Americans) for further review.
Each year PerformLine reviews and analyzes the CFPB complaint database. Our recent report finds that companies that have over 100 complaints submitted by servicemembers have a 40% increased probability of being fined by the CFPB. Even further, companies with 100+ complaints submitted by older American servicemembers (62 years or older) are 76% more likely to face penalties and fines.
The takeaway for Financial Institutions is that remaining diligent in monitoring, responding to, and resolving consumer complaints in a timely manner — especially those from "special groups" — is critical to a sound compliance practice and to avoiding regulatory scrutiny.