RSSCredit reporting and debt collection topped the list of complaints filed by servicemembers, according to a recent report from the Consumer Financial Protection Bureau.
In 2020, the bureau received over 40,000 complaints from servicemembers, veterans and their families. Credit or consumer reporting accounted for the bulk of complaints (16,600 or 41 percent), with debt collection (8,900 or 22 percent) and mortgages (4,300 or 11 percent) rounding out the top three categories of complaint.
Compared to 2019 data, categories with notable increases in complaints were credit reporting (up 30 percent), money transfers and virtual currency (up 36 percent), and prepaid cards (up 66 percent). Servicemembers are more likely to submit complaints about debt collection, mortgages, and credit cards.
Because military security clearances require regular credit checks, inaccurate information in a credit report can have a large impact on servicemembers’ job performance and income.
“I have sent several complaints…about fraudulent accounts and inquiries…There is no credit repair company helping me I [… am] the only one disputing these fraudulent. charges and inquiries,” one submitted complaint said. “My job and top-secret clearance is in jeopardy because of these fraudulent accounts and inquiries. I have to provide for a family of seven.”
A significant number of complaints about debt collection stemmed from identity theft issues. In 2020, the FTC released a report that examined five years of identity theft data and showed that active duty servicemembers are 76 percent more likely than nonservicemembers to report fraudulent misuse of an existing account. One servicemember, who had filed an identity theft report, said the credit reporting company was unresponsive to attempts to remove the debt. “I am in the process of closing on my house and the [company] keeps updating my report showing I’m late. I have no idea why this matter has not been removed when it’s clearly not my debt,” they wrote. “I am a military veteran who in that year was not even in the country.”
Mortgage complaints largely centered around the payment process. Some complaints mentioned receiving unsolicited mailers about refinancing current VA loans, including some which were “were disguised to look like official notices” from the government, the report said.
On a per capita basis, more complaints were received from servicemembers in the state of Georgia than anywhere else in the United States, followed by Nevada, Washington, D.C., Maryland, Virginia, and South Carolina. The military bases with the most cumulative complaints in 2020 were Ft. Bragg, Ft. Hood, and Camp Pendleton.
“Even though the pandemic has changed where we work and how we interact with our colleagues, the bureau remains committed to educating and empowering servicemembers, monitoring their complaints, and coordinating with other state and federal agencies to ensure their financial concerns are given the attention they deserve,” said Jim Rice, CFPB assistant director, office of servicemember affairs, in the report.
