Consumer Financial Protection Bureau (CFPB)

Have you ever felt like suing a bank but did not want to spend the time and money in doing so? A complaint to CFPB is the closest you can get (for free).

I will use ‘bank’ as an exmaple but CFPB (and most of this post) is equally applicable to credit unions, credit reporting agencies, money transfer agencies, payday lenders, mortgage servicing firms, and debt collection agencies.

So you can reach out to CFPB for help if you have an issue for example with Citibank, Wells Fargo, Chase, Transunion, Equifax, or Western Union.

CFPB is your friend

CFPB is not an attorney acting on your behalf BUT some of the ‘effects’ are similar – you will get a response on time and many a times it will have the details of what you were looking for.

Often enough, the matter will be resolved in your favor if the bank realizes that they were at fault.

Going to CFPB does not stop you from taking any other action that you might be entitled to (for example – suing the bank).

Why does the CFPB model work?

It works in your favor because of the following reasons:

  1. Banks do not have a choice, they have to respond
  2. Banks have to be careful about what they respond – their response is going to a regulatory body
  3. It is no longer your job to find who the concerned person/ department is within the bank to answer your query
  4. It all happens online

Banks do not have a choice

It has happened to me multiple times that the bank just did not get back to me on my issue. They cannot do that with CFPB. With CFPB, they have to respond and that too in a timely manner.

Banks have to be careful

I have often enough encountered under-trained customer service professionals at banks who really do not know what they are talking about.For example, I was told that a second add-on card will be free while they later charged me a $14.99 fee for it.The chances that your CFPB complaint is answered by someone under-trained are very less. These complaints usually are answered by responsible knowledgeable people.

These people are aware that all the responses are being monitored by CFPB and too many issues can lead to regulatory action (disciplinary actions like fines).

Concerned person/ department

One of the most common problems incurred by customers in talking to customer service representatives (CSR) of the bank is “I am not from that department”. See if the below sounds familiar:Bobby goes and finds the 1-800 number online (or on the back of the credit card)
Bobby finds a quiet place to make that phone call
Bobby dials 1-800-000-0000 and goes through the entire menu, press 7 for accounts, press 3 for credit cards
Bobby enters his account number so that the process goes quickly
Bobby is asked for more identification information
Now Bobby listens to music
Bobby listens to more music
Your call is important to us, please wait for the next available agent
Some more music
An agent comes online and asks for more information to identify my account
Bobby explains the problem
CSR: Sure, I will help you today, may I please place you on a brief 2 to 3 min hold?
After 2-3 min, I cannot find any notes on your account
Bobby: I spoke to ‘Mike’ last week
CSR: I am sorry Sir but there is nothing on the account
Bobby: Ok, can you please tell me about ‘that charge’?
CSR: Sir you would have to talk to ‘the other’ department’. May I give you their direct number?
Bobby: Yes please
CSR: 1-800…..

So after 30 – 40 minutes, I have a new 1-800 number.

CFPB eliminates this problem, and rightly so. I mean, I am not making a sales call here that navigating through a bank’s hierarchy and internal organizational structure is my responsibility. If I have an issue with the bank, the bank should take ownership and get me an answer.

When you make a complaint at CFPB, you just provide basic information about the bank / product/ complaint. You leave the rest for the bank to figure out.

Online

All of the CFPB process happens online. You go to their website and make a complaint online. You instantly get an email confirmation. Usually within 5 minutes, you will also see another email that says “your complaint has been forwarded to the company for a response”.

The company responds within a few days (usually somewhere between one and 2 weeks). You can read the response online. Most will also send you the same response by paper mail.

At this point, you can either do nothing or dispute the response. If you dispute the response, CFPB and the bank both know that you disputed. The bank is not liable to respond again but CFPB makes a note of it and acts if there are too many disputes of a similar nature.

Personal experience

The screenshot below shows 10 of the complaints I have filed so far. You can see that I  disputed a couple of the company responses. For a couple (the top 2), I am still within the 60 day period to dispute the company response. For the rest, the status is ‘response not disputed’ – this means company provided information that was satisfactory.

In some cases, I was able to get a faster and more accurate response through CFPB rather than talking to customer service (of the bank).

CFPB – real example

I was helping a friend obtain a copy of her credit report. Here is a screenshot of the complaint from the CFPB website:

Here is the screenshot of the company’s response from the CFPB website:

To summarize: this friend of mine was trying to get a copy of her credit report for more than 6 months from Equifax. She was unable to do it online, she requested it by mail, they asked for additional documentation, and then silence for several weeks. So on and so forth.

When she filed a complaint with CFPB – she had a copy of her credit report in her hand within 10 days. It frankly can’t get better than this.

Helpful tip

Keep emotions away – Of course things have been wrong to a certain extent therefore you are at the CFPB site but keep the emotions away. I have learned it by experience.

Look at the following two descriptions of the same situation, tell me which one is better?

  1. They charged me $50 for xyz – this is unfair because xyz. I expect the fee to be refunded
  2. They charged me $50 for xyz. Other banks in the industry do not charge this fee. It looks like they do not care about customers. I am thinking about taking my business to another bank. When I called up the customer service, the bank representative said there is not much she can do. I asked her if I can speak with a supervisor, she took down my contact details and said the supervisor will call me back but the supervisor never did. The bank has very poor customer service. I am fed up with the bank.

The first one is better – both the descriptions will likely lead to the same end result, but the first one is crisp and precise. You are being very clear in what happened and the remedy you are requesting. It does not leave any room for confusion/ misinterpretation.

Making money by moving money – 1

Make money by moving money

Make money by moving money

Today we will see how to make $592 in 22 minutes.

I received a letter today by mail that told me about a promotion offer being run by a bank: Earn a $500 bonus by depositing $50,000 for 90 days.

Essentially – you open a savings account with this bank, transfer $50,000 to the new account, leave the money there for 90 days, and the bank gives you $500.

Although I will explain the $50,000 example today, the bank has offers for deposits starting $5,000. 

What is the ROI (Return on Investment)?

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IRS Notice CP14 – Case Study

We will understand what IRS Notice CP14 is and go through a real IRS Notice CP14 that a reader sent to me – understand each section before deciding a future course of action.

A reader sent me the attached asking for my interpretation of the notice. (It is an actual notice that came in today, I have deleted all the PII (Personally identifiable information) – name, address, and social.

What is IRS Notice CP14?

IRS Notice CP14 Albert EinsteinUnderstanding IRS Notice CP14 is pretty straight forward, as it is with most things when someone tries to explain it in simple English. There are two reasons why ‘some’ professionals do not explain things in a simple manner – sometimes they use arcane esoteric language purposefully so that they can charge you a lot of money or they don’t understand the subject well enough.

IRS Notice CP14 is an automated system notice that one usually gets after about 3 – 4 weeks from the date of filing your tax returns. In this case, the reader filed the taxes for 2014 on 10/15/2015 and the Notice date is 11/16/2015 (so about 4 weeks).

Simply stated – IRS Notice CP14 states that the taxes you owed (per your calculations) have not been paid yet. There is underpayment of taxes – tax reported on your return is more than the payments that have been made to your account. This usually is accompanied by interest and penalty charges too.

Payments that have been made to your account

This is not always the same as the payments that you have made. Continue reading

Insurance plan selection – Case Study

We will take a real example to understand how to compare health care insurance plans. We will discuss pros and cons of a high deductible plan versus the high premium plan, with lots of pictures.

Today we will analyze why do people take health insurance and do a real life case study requested by one of the readers (we will call her ‘DB’).

Risk ManagementInsurance is closely related to risk. Whenever you face risk, you have 4 options: Transfer, Accept, Reduce, Avoid (popularly known as the TARA model).

For the health care expenses risk, Avoid is not really an option -> Avoid would mean you are dead, therefore there is no risk of incurring health care expenses.

Risk Management Applied to health care (insurance plan selection)So in the health care expenses risk context, the high probability high impact quadrant becomes ‘Transfer’ instead of ‘Avoid’.

And in this post today, we will focus on ‘Transfer’ -> Insurance is a way to transfer the health care expenses risk to the insurer (insurance company). And we buy insurance for events where the impact is high.

Now let us talk about the specific real life case study of a reader (we will call her DB).

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