The CFPB’s Office of Servicemember Affairs has released its annual report on complaints submitted to the Bureau by servicemembers.

The report covers the period April 1, 2017 through August 31, 2018.  During that period, the Bureau received approximately 48,800 complaints from servicemembers, with credit reporting, debt collection, and mortgages, respectively, the first, second, and third most-complained-about financial products or services.  The majority of credit reporting complaints involved perceived inaccuracies on servicemembers’ credit reports.  The most common type of debt collection and mortgage complaints were, respectively, continued attempts to collect a debt that the servicemember believes is not owed and problems servicemembers faced when unable to make payments, such as issues relating to loan modifications or collections.

The report includes a section entitled “How servicemembers interact with financial products” that provides examples of the rates at which servicemembers and veterans use common consumer financial products and services, such as checking accounts, credit cards, and auto loans or leases.

Another section of the report entitled “Emerging issues and continuing trends in the financial marketplace for servicemembers” discusses various issues experienced by servicemembers and the CFPB’s work in response.  These issues include:

• Heightened concern about inaccuracies on credit reports due to new Department of Defense security clearance rules that include a “continuing monitoring” policy under which servicemembers’ credit histories are checked automatically rather than periodically (e.g. every 5 years).  The Bureau states that it often hears from servicemembers “who are worried that incorrect information on their credit reports will put their security clearance, duty status, potential promotion, or even military career in jeopardy.”
• Medical debt on credit reports, in part due to greater use by servicemembers of civilian emergency care and outpatient services that require out of pocket payments.
• Difficulty repaying debts owed to the Department of Veterans Affairs.
• Vulnerability of servicemembers to telecommunications debt due to frequent moves and the accompanying need to suspend or cancel and re-establish telecommunications services.
• Confusion resulting from waivers or reductions of annual fees charged to servicemembers in connection with premium credit cards.  (The Bureau indicated that once it identified this trend in credit card complaints, it worked with a particular credit card company whose waiver notice to consumers was found to have created the confusion to craft a clarifying letter to affected consumers.  The Bureau stated that “since collaboratively addressing the problem through education with an industry partner, we have seen a significant decrease in this specific complaint type about this company.”)
• Student loan servicing problems such as delayed processing of applications for income-driven repayment or misapplied payments and difficulty accessing disability discharge protections.
• Insufficient understanding of auto add-on products, including not understanding that such products are optional, would be added to the amount financed, and with regard to GAP, that the insurance can be voided if the servicemember’s car is taken overseas.