American seniors continue to face financial “pain points” in the marketplace, as evidenced by the volume and types of complaints that are submitted to the Consumer Financial Protection Bureau’s (CFPB) complaints database, the largest. large share of complaints among the elderly being centered on credit reporting agencies which can affect the personal reports of consumers used in banking, insurance, employment or other major business services. The reverse mortgage industry is featured in the data as well, but with much less negative impact on the financial stability of U.S. seniors.
That’s according to a new report analyzing CFPB consumer complaint data by AARP.
While the share of credit report complaints encompasses up to a quarter of all complaints submitted by seniors to the CFPB, other segments have increased since the reporting period between 2018 and 2021, according to the AARP.
“Complaints relating to credit cards or prepaid cards have increased as a proportion of complaints from seniors in recent years, forming the second highest category for 2020 (at 23%) and the third highest category in the last six years. first months of 2021 (19%). report said. “Debt collection complaints from older people have declined somewhat in recent years as a relative proportion of all complaints, from 17% in 2018 to 12% in 2020 and early 2021. Complaints about banking products such as that checking or savings accounts ranged from 9% to 13% between 2018 and early 2021, placing them in fifth place in the first three years and narrowly exceeding debt collection for fourth place in the first half of 2021 .
According to the data, smaller shares of complaint totals relate to areas such as money transfers, title and payday loans, student loans and auto loans.
Although not part of the body of the published report, a detailed footnote shows that the AARP aimed to quantify the impact of the reverse mortgage industry on the financial stability of seniors, and what has motivated some of their complaints to the CFPB.
“[A]Among senior consumers who reported in 2020 that they were having trouble paying their mortgages, 6.5% had a home equity loan or line of credit, and 3.5% had a reverse mortgage, ”describes the AARP. “Among senior consumers who reported in 2020 having problems with their mortgage payment process, 6.5% had a home equity loan or line of credit, and 4.4% had a reverse mortgage. “
In both home equity / HELOC loans and reverse mortgages, this included a smaller share of senior citizen complaints in those categories than in 2018 or 2019, according to the data. Among plaintiffs who chose not to identify as seniors, around 5% of mortgage complaints in 2020 in these two areas were for home equity / HELOC loans while less than 1% were for reverse mortgage, details the report.
“This is not surprising given that federally guaranteed reverse mortgages (known as Home Equity Conversion Mortgages, or HECMs) are only available to homeowners age 62 or older.” , indicates the note.
Read the report on AARP.