The Consumer Financial Protection Bureau (CFPB) has released their latest monthly complaint snapshot, and it goes into detail about the problems customers have sending and receiving funds.
CFPB director Richard Cordray said problems transferring money could have serious consequences. “People rely on the money transfer process to make payments and take care of family members that they cannot be with,” said Cordray.
Between July and September 2015, the top four companies that people registered complaints against were MoneyGram, Western Union, PayPal, and JPMorgan Chase. These four represented 80% of all complaints having to do with transferring money. However, the CFPB advises people to take into account company size and activity in the market when evaluating this information; these four businesses are some of the biggest ones that do money transfers and represent the lion’s share of the market.
Fraud, transfer problems, customer service, and error resolution are key issues
As of the beginning of December 2015, the CFPB had fielded about 5,100 complaints about money transfers. This includes both domestic and international transfers. People transfer money to folks around the country and overseas in order to do things like pay school fees, pay rent for relatives who may be elderly or otherwise needy, and cover living expenses.
Four key issues were identified with regard to the complaints:
• Fraud.Forty-two percent of complaints had to do with fraud. One common theme involves an imposter asking someone to transfer money to a family member who is in trouble in some way. Although this common scenario is a legitimate concern and serious problem, the CFPB points out that it is not a complaint about an actual company of financial institution, but rather a criminal complaint.
• Money transfer problems. These include unexpected and significant delays in transactions going through, as well as amounts of money being smaller than they thought they would be, once they were completed.
• Poor customer service. Many folks were frustrated with the customer service provided when they contacted companies for assistance. Long hold times when calling, confusing or insufficient information being given, and the inability to contact a representative from the actual company, were commonly cited as problems.
• Error-resolution. When people were awarded refunds on problematic money transfers, they were often subject to lengthy delays. People also often said they weren’t clear about their rights when seeking to rectify errors with regard to money transfers.
The CFPB said they are committed to addressing these issues, as well as other problems consumers have transferring funds. “Through rules on international money transfers and continued supervision of this important financial service, the Bureau is working to make sure that consumers can easily send money without having to worry about delays or hidden fees, said the CFPB’s Cordray.
The Monthly Complaint Report can be accessed here.