The pandemic and lack of federal unemployment assistance are two reasons why Detroit Action says rent and mortgage payments should be canceled with an eviction moratorium.
Detroit Free Press
Reach out to your financial institution and credit bureaus to confirm new payment terms and sign up for a near-instant credit-monitoring service.
Whether you’re talking about the harrowing death toll, the economy or the new socially-distanced way of life, the coronavirus pandemic has certainly placed us in unprecedented times.
Adding to that, a new report from financial services company LendEDU found there’s been an unprecedented surge in the number of consumer finance complaints during the pandemic.
The report from LendEDU analyzed the Consumer Financial Protection Bureau’s consumer complaint database, which provides a portal to consumers looking to file a grievance against their respective financial institutions or lenders.
Even before the pandemic, when the economy was humming, many people were struggling with their finances. Now, many more are in trouble. These are resources to help. (Photo: Getty Images/iStockphoto)
In the nation
On a national level, there’s been a 44% year-over-year increase in the number of consumer finance complaints filed from March 13 to July 17. Complaints rose from 97,008 during that period in 2019 to 140,042 during the same time frame in 2020. For reference, March 13 is when President Donald Trump declared a national emergency because of the COVID-19 pandemic.
Specifically, there was an 84% year-over-year increase in the number of complaints pertaining to credit reporting, a 77% increase in complaints related to money transfers and a 29% rise in grievances regarding a credit card or prepaid card.
A subscription gives you unlimited access to stories across Tennessee that make a difference in your life and the lives of those around you. Click here to become a subscriber.
In the state
In Tennessee, the trend is no different, as finance complaints filed by consumers in the Volunteer State have risen by 88% year over year during that same time period. While there were 1,628 consumer finance complaints filed from March 13 to July 17 in 2019, there were 3,068 filed between the same dates in 2020.
Breaking it down further, Tennessee saw a 151% year-over-year increase in credit reporting complaints, a 33% surge in credit card or prepaid card complaints and a 52% rise in money transfer grievances.
A new AP-NORC poll finds that just under half of all Americans are saving more money now than they were before the coronavirus pandemic. About two-thirds say they are spending less. (Photo: THE ASSOCIATED PRESS)
Pandemic recession hit hard
So why is this happening in Tennessee and across the entire country? The pandemic-induced recession has hit consumers hard, and many have struggled to make monthly payments on things like a mortgage or student loans. In light of this struggle, however, financial institutions have agreed to reduced payments or forbearance periods with their customers.
Hear more Tennessee voices: Get the weekly opinion newsletter for insightful and thought-provoking columns.
However, it appears that consumers are receiving negative marks on their credit reports for things like an insufficient or missed payment even though they had agreed to new payment terms with their lenders in light of the pandemic.
What’s a consumer to do?
As a consumer, there are a couple of things you can do to reduce your chances of something similar happening to you. First, reach out to your financial institution and the main credit bureaus to confirm your new payment terms if you have worked out something like a reduced minimum payment during the pandemic.
Additionally, maintaining communications with your lender and the credit bureaus will go a long way towards resolving the issue if something happens or has already happened.
Second, sign up for a near-instant credit-monitoring service like CreditWise so that you can constantly monitor your credit health and quickly catch and resolve an erroneous negative mark. A service like this won’t produce as robust a credit report as you could get from a credit bureau like Experian, but it provides enough information so you can detect if something is wrong and is an easy process that won’t take more than five minutes.
The coronavirus pandemic has exposed many deep structural flaws, among them the way our financial institutions report new information, but hopefully, by learning through this experience we can improve the way things are done. Until then, stay on top of your credit health to stop something similar happening to you.
Mike Brown is the director of communications at LendEDU.
Read or Share this story: https://www.tennessean.com/story/opinion/2020/09/07/what-do-pandemic-related-surge-consumer-finance-complaints/5736007002/
