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Bucks Blog: The Most Common Consumer Complaints

March 28, 2013 by Leave a Comment

Consumer complaints to the Consumer Financial Protection Bureau were most often about mortgages and credit cards, according to a summary the agency issued Thursday.

The federal agency began taking complaints about credit cards in July 2011 and has gradually added other categories, including mortgages, bank accounts, private student loans and other consumer loans. Most recently, it added credit reporting as a category, and is working to add others including payday loans and debt collection.

The agency this month expanded its publicly available searchable database of complaints, and is encouraging analysis of the data. The database now contains about 90,000 complaints, the agency said. The agency also published a “snapshot” of the more than 131,000 complaints received from July 2011 through February of this year. (The number of complaints in the summary is larger than in the database because it includes complaints that were referred to other regulatory agencies,  found to be incomplete or are pending further review, the agency said.)

The summary shows that about half of the 131,000 complaints received concern mortgages — as might be expected, given the extended fallout of the housing crisis. The most common complaints concerned problems consumers encountered when they were unable to make payments, like issues with loan modifications or foreclosures.

“The complaints indicate consumer confusion persists around the process and requirements for obtaining loan modifications and refinancing,” the report said, particularly on issues involving submission of documents, payment trial periods and allocation of payments.

Roughly a quarter of complaints received by the agency overall related to credit cards, with billing disputes the most common problem.

More than 80 percent of the total complaints have been sent to companies for review and response. Companies have responded to 95 percent of complaints received, the report said.

The database includes companies’ description of actions they have taken to address the complaint. A company may label the complaint, for instance, as “closed, with monetary relief.”

Consumers can review and dispute the company’s response, and the agency uses that feedback to decide if the complaint warrants further investigation.

“By sharing these complaints with the public, we are creating greater transparency in consumer financial products and services,” Richard Cordray, the agency’s director, said at a public hearing in Des Moines, where the expansion of the database was announced.

Have you complained to the Consumer Financial Protection Agency? What was the result?

Article source: http://bucks.blogs.nytimes.com/2013/03/28/the-most-common-consumer-complaints/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Default Seen as Unlikely, but Markets Prepare

July 24, 2011 by Leave a Comment

Some debt traders said they were looking for evidence of progress toward a deal before markets open on Monday.

“This press conference was a pretty significant moment,” said Ajay Rajadhyaksha, head of United States fixed-income strategy at Barclays Capital, referring to President Obama’s announcement after markets had closed for the week that talks had broken down. “I would be pretty surprised if investors did not exhibit a greater degree of worry when we walk in Monday morning than they have shown so far.”

Aware of the pressure of Monday’s market opening, Speaker John A. Boehner said Saturday that Congressional leaders were working on a new deficit-reduction plan that would resolve the impasse and allow the debt ceiling to be raised. He said he hoped the plan could be announced within the next 24 hours.

Even if a deal is reached, investors have become increasingly worried that the rating agency Standard Poor’s may reconsider its certification of government securities as an ultrasafe investment. The company has said there is a 50 percent chance it will downgrade the rating in the next three months, depending on whether the federal government adopts a long-term plan to pay down its debts. Such a move could send interest rates higher for a broad range of government and consumer loans.

Some of the options still on the table to raise the debt ceiling, involving smaller packages of spending cuts, might not be sufficient to satisfy S. P. or Moody’s and Fitch, two other rating agencies that have expressed concern over the debt negotiations.

“I think the market still has confidence that the debt ceiling will be raised in time,” said Terry Belton, head of fixed-income strategy at JPMorgan Chase. “The focus is on downgrade risk.”

A downgrade would raise the government’s borrowing costs, exacerbating its financial problems, because investors generally demand higher interest rates to hold riskier debt. Consumers and businesses also would face higher borrowing costs because the rates on Treasuries are widely used as a benchmark to set the rates on other kinds of loans.

The government cannot borrow more than $14.3 trillion, the current debt ceiling, a limit that it reached in May. Since then, however, Treasury has continued to repay securities as they come due and issue new debt in their place, a process known as rolling over debt. Officials are concerned that it will become harder to find investors willing to participate in the weekly auctions, and that the remaining buyers will begin to demand higher interest rates.

Over the last few weeks staff members in the Office of Debt Management, a part of the Treasury, have been phoning the desks of the 20 major Wall Street dealers for Treasury bonds to assess investor demand for coming debt auctions, and to seek assurances that the dealers themselves will buy any surplus.

About $87 billion in federal debt comes due on Aug. 4, and roughly $410 billion comes due throughout the rest of August. If interest rates climbed even a tenth of a percentage point, the added cost to roll over the debt would be an extra $500 million a year.

Wall Street is also worried about the effect that a ratings downgrade would have on various assets that are implicitly backed by the federal government, including agency mortgages or municipal bonds.

The heightened uncertainty is prompting financial firms and other companies to stockpile cash. Walter Todd of Greenwood Capital, a wealth management firm in Greenwood, S.C., said that so far he had advised his own worried customers not to do the same, operating under the assumption that a deal would be reached. But after the talks fell apart on Friday, Mr. Todd said he and his partners began to discuss a more pessimistic possibility.

“If nothing changes, if the headline out of the weekend is that the talks have broken down, I think you’ll start to see assets reacting to that,” Mr. Todd said. “It blows my mind that it’s come to this. It’s incredibly irresponsible what’s happening, on the part of both sides.”

Other investors said they did not view the opening of markets on Monday as a critical deadline, as they still expected a deal, but that each passing day would put a little more stress on the markets. Bond prices fluctuated last week on the news from Washington, falling Thursday after S. P.’s latest warning, then rising on Friday amid renewed talk that a deal was imminent.

“Every day without an agreement increases the risk of default,” said Ward McCarthy, chief financial economist at Jefferies Company. “Congress likes to go to the edge of the precipice with the debt ceiling, and we are headed toward the edge again.”

Binyamin Appelbaum reported from Washington, and Eric Dash from New York. Louise Story contributed reporting from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=45b12a0949655ce6e82c93ae9a944969

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Free-Spending Turkey Hopes to Avoid a Fall

April 25, 2011 by Leave a Comment

Stock brokers endure four-month waiting lists to pay as much as $150,000 for top-of-the-line Audis and BMWs — twice the manufacturers’ prices after taxes. A real estate developer recently laid out a record $33.3 million an acre for a 24-acre plot of land in Istanbul’s city center.

But the most striking sign that the economy here may be overheating comes from a usual suspect: the country’s aggressive banks. They have found a creative way to finance consumer splurges by providing quick loan approval via text message or A.T.M. machine.

Analysts and bankers say the explosive growth in consumer loans has fed a worrying expansion of the country’s current account deficit, estimated to be 8 percent of gross domestic product this year.

Turkey’s trouble in financing gaps of that size has been at the root of  its past two busts, and some worry that history may be repeating itself.

“We are again producing and consuming beyond our capacity,” said Atilla Yesilada, an economist at Istanbul Analytics, who has lived through Turkey’s last two busts, in 1994 and 2001. “We are financing our growth entirely through foreign credit, which is becoming more expensive. At some point life catches up with you, and you crash.”

More than any other emerging economy, Turkey has been on a roller-coaster ride over recent decades, in which manic growth has almost inevitably been followed by a sickening crash.

But this time will be different, promises the popular government of Prime Minister Recep Tayyip Erdogan, who is heading for a nationwide election in June in which the robust economy is widely expected to carry him to an unprecedented third term in office.

Many people have said as much just before the Turkish economy collapsed, of course. But here in Turkey, whose decade-long expansion was only briefly interrupted during the global financial crisis, the government and many business leaders argue that their nation has moved beyond its boom and bust syndrome, and that policy makers are now well-equipped to pull off a so-called soft landing.

“We are looking for 4.5 percent growth this year, and we think that is manageable for the economy,” said Faik Acikalin, the chief executive of Yapi Kredi Bank, one of the country’s largest providers of consumer loans.

Since the government’s crackdown on overly enthusiastic credit card lending by banks in the last decade, general purpose consumer loans have become the preferred vehicle for financing domestic demand here.

According to research from Standard Unlu, an Istanbul-based investment bank, general purpose personal loans grew at an average annual clip of 61 percent from 2005 to 2008 and have barely slowed since, registering a 42 percent gain last year.

It is not surprising that these loans have become so popular — for banks as well as customers.

After a consumer receives a text message from the bank informing him that he qualifies, or a note that he may pick up at an A.T.M, all he needs to do is pay a quick visit to his bank branch and collect the cash.

Mr. Acikalin insists that a close credit watch is being kept. And he says nonperforming loans are extremely low, at about 3 percent of loans outstanding. Broadly speaking, he adds, the Turkish banking system is in better shape than ever.

He points out that after the 2001 crisis — when scores of thinly capitalized banks failed — the government imposed stiff capital and lending rules that protected banks from the worst ravages of the brief 2009 recession, when the economy fell by 4.8 percent.

Under Mr. Erdogan, who heads a government with a Muslim character sharper than any in the 88-year history of the modern Republic of Turkey, the country has plenty to crow about. Turkey generated a gross domestic product of about $730 billion last year, making its economy the 17th largest in the world.

Article source: http://www.nytimes.com/2011/04/26/business/global/26turkey.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,