In the year since COVID-19 lockdowns began in the U.S., customer complaints reveal the ongoing impact of the pandemic and its economic fallout on customers. With the PositivityTech® Intelligent Platform, customer complaint data captures this reality and presents critical opportunities for banks and credit bureaus to repair practices.
Problem 1: Health impacts finances
As early as April 2020, customer complaints, like the one below, began to reveal the impact of their health stress on their financial stress. This impact continued to grow, with complaints to the Consumer Financial Protection Bureau increasing by almost 54% in 2020, according to their recently released annual report. With PositivityTech, we identified that COVID-19-related complaints also continued to increase throughout 2020 and are continuing in 2021.
Sample customer complaint: “I was admitted to the hospital in XXXX. Not only did I have the XXXX and was in the hospital for a long time, I lost my job. I spoke with XXXX and was advised my payments were deferred until XX/XX/2020. I get a credit alert and they have reported me as past due. This is a VIOLATION OF THE CARES ACT AND THE LATE PAYMENT NEEDS TO BE REMOVED!… I was told I was provided protections under the CARES ACT and they failed to adhere to what was offered to me!”
Problem 2: Payment deferrals are not a long-term solution
With many Americans furloughed or unemployed due to the pandemic, banks offer temporary forbearance or forgiveness programs to ease the financial pressure of payments due on loans. Yet, ultimately, are these programs helping customers?
a. When payments were due three months later, customers approved for these programs were often unable to pay.
Sample customer complaint: “My husband recently passed. I am presently in processing for mortgage assistance with my mortgage company. I requested a forbearance because I had been affected by Covid-19. My mortgage company is giving me a hard time even though President Biden has signed an executive order for foreclosures to be put on hold. My property is set for foreclosure sale… I need Help.”
b. Forbearance approvals were misreported, causing delinquencies and plummeting credit scores. Until these issues are repaired, they will create another level of hardship for customers seeking credit.
Sample customer complaint: “I have attached for reference the Forbearance Agreement dated XXXX/2020 along with the Forbearance Letter confirming the forbearance was granted dated XXIXX/2020. This letter specifically states the following – you are not required to make any payments during the forbearance. The three bureaus are reporting the lates in error and it is seriously harming my credit score. These line items need to be removed and/or updated to report accurate information. It is a violation of the Fair Credit Reporting Act to not report accurate information on a credit report.”
Problem 3: Credit bureaus’ inaccurate data is affecting economic recovery
The ongoing problems within credit bureau reporting will continue to create disruptions for economic recovery. Credit bureaus are the central repository of information that all consumers and companies alike depend on, and their veracity is assumed.
“The pandemic has been among the most disruptive long-term events we will see in our lifetimes. Not surprisingly, the shockwaves it sent across the planet were felt deeply in the consumer financial marketplace,” CFPB Acting Director Dave Uejio said in a press release.
Steps Toward Recovery
Using the PositivityTech platform, banks and credit bureaus can see the impact of the pandemic on their customers, and can work together to fix these issues.
You can uncover what your customer complaint data reveals about the risks ahead.
You can understand how to solve the issues your customers are facing.
You can act upon the insights your own data highlights.
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