A new report released by the Consumer Financial Protection Bureau covering more than three years of complaints by military service members shows that although gripes about auto loans were a small part of the mix, they were a large part of the CFPB’s enforcement actions.
In the report released last week, which lists 29,500 complaints collected from July 2011 to Dec. 31, 2014, there’s no neatly defined category for complaints about auto finance. The best fit for auto-related complaints is a category the bureau calls consumer loan, which accounts for only 5 percent of the total number of complaints.
Within that small number, complaints include items such as “required add-on products,” “trade-in payoff” and complaints about GAP and credit insurance.
For the whole report, the top complaint categories are debt collection (accounting for 39 percent of total complaints), mortgage (24 percent), credit reporting (9 percent), credit card (8 percent) and bank account or service (8 percent). Consumer loan follows at 5 percent. Yet the report prominently highlights actions the CFPB has taken to crack down on auto loans.
Those include a consent order that led to a change to the military pay allotment system. Car payments were taken off the list of things military members can set up for automatic payments via the system.
Other complaints the CFPB highlighted in the report include high interest rates on auto loans to military members and auto loan collection agents phoning military commanders. There’s also a link to a video with a personal story about “predatory” auto loans.
“Military consumers have reported concerns with high interest rates on their auto loans, often citing rates as high as 29 percent,” the report said.
That’s probably true, but in reading the report, those complaints don’t appear to be very common.