Problem? Consumer Financial Protection Bureau Now Accepting Complaints

Consumer Financial Protection BureauThe Consumer Financial Protection Bureau (CFPB) announced that it is accepting complaints from consumers encountering problems with loans from online marketplace lenders. The Bureau is also releasing a consumer bulletin that provides an overview of marketplace lending and outlines tips for consumers who are considering taking out loans from these types of lenders, according to the release.

Richard Cordray“When consumers shop for a loan online we want them to be informed and to understand what they are signing up for,” said CFPB Director Richard Cordray. “All lenders, from online startups to large banks, must follow consumer financial protection laws. By accepting these consumer complaints, we are giving people a greater voice in these markets and a place to turn to when they encounter problems.”

Millions of consumers take out personal loans online. As most readers know, marketplace lending—often referred to as “peer-to-peer” or “platform” lending—is a relatively new kind of online lending. To recap, a marketplace lender uses an online interface to connect consumers or businesses seeking to borrow money with investors willing to buy or invest in the loan. Generally, the marketplace lending platform handles all underwriting and customer service interactions with the borrower. Once a loan is originated, the company generally makes arrangements to transfer ownership to the investors while it continues to service the loan.

Marketplace Lending Consumer Bulletin
A marketplace lender may offer different types of financial products such as installment loans, mortgages, student loans, or auto loans, noted the release. Marketplace lending platforms generally market both new loans and loans that can be used to refinance or consolidate existing debt. Today’s consumer bulletin offers information for consumers who are considering a loan from a marketplace lender, including:

  • Money Benjamin Dollars 100Important consumer protections apply: Marketplace lenders are required to follow federal and state consumer financial protection laws.
  • Be careful about refinancing certain types of debt: While some marketplace lenders may advertise lower interest rates, in some cases consumers could lose important loan-specific protections by refinancing an existing debt. Specifically, consumers should know that they may sign away certain federal benefits, such as income-driven repayment for federal student loans or servicemember benefits related to debt incurred prior to entering active duty.

The consumer bulletin also highlights general steps consumers should take when shopping for a loan, including a loan from a marketplace lender. Key tips include:

  • MoneyLook at income and spending: Before taking out a loan, consumers should evaluate how much they can afford and really need to borrow. Consumers should understand the total cost of the loan as well as what the total monthly cost will be each month.
  • Check credit reports: Consumers should check their credit report to make sure there are no errors that could keep them from getting credit or getting the best available terms on a loan. Consumers should be sure the information in the report is accurate and up-to-date.
  • Shop around: Consumers who consider interest rates offered by multiple lenders or brokers may see substantial differences in the rates. Consumers should compare the costs and terms of loans to find the deal that is best for them.

Marketplace Lending Complaints
Courtesy ptmoney.com
The CFPB began accepting complaints in July 2011 and currently accepts complaints on many consumer financial products, including mortgages, bank accounts and services, credit cards, student loans, auto and other consumer loans, credit reporting, debt collection, and payday loans. Because marketplace lenders offer several types of consumer loans, a consumer submitting a complaint should select among the different complaint categories for products and services that best apply to their situation, according to the CFPB. For example, a consumer can select products such as “mortgage,” “consumer loan,” or “student loan.” The CFPB forwards complaints to the marketplace lender and works to get a response – generally within 15 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website. The CFPB expects companies to close all but the most complicated complaints within 60 days.

To submit a complaint, consumers can:

  • Go online at www.consumerfinance.gov/complaint
  • Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
  • Fax the CFPB at 1-855-237-2392
  • Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244

The CFPB provides complaint-handling services to consumers in more than 180 languages and to consumers who are deaf, have hearing loss, or have speech disabilities via the Bureau’s toll-free telephone number.

If any Crowdfund Insiders have filed a complaint with the CFPB, share your experience.