CFPB report on military shows few auto loan complaints
A report by the Consumer Financial Protection Bureau on complaints from service members, veterans and their families shows that complaints about consumer loans of which auto loans are but one type make up just 5 percent of the total. The CFPBês report is based on fielded 1,400 consumer loan complaints from service members from July 2011 to December 31, 2014.
The largest category of complaint (43 percent) was about managing the loan, lease or line of credit, followed by taking out the loan or lease/account established to include terms and changes, required add-on products, trade-in payoff and fraud, at 23 percent. Just over 20 percent of consumers had problems when they were unable to pay, to include debt collection and repossession. And 11 percent complained about shopping for a loan, lease or line of credit, including sales tactics, credit denial or confusing advertising.
Military consumers have reported concerns with high interest rates on their auto loans, often citing rates as high as 29 percent, the report says. The high rates contribute to payment defaults, the risk of repossession and abusive debt collection practices. The report cites one service member who said that not only was his car repossessed, but the company also contacted multiple superiors in his chain of command about his missed payments.
Such incidents made up a fraction of the complaints the CFPB received, but the report features them prominently. Read on for the reaction of one Member of Congress.Download Bulletin PDF