October 22, 2012

4 firms had most Ariz. credit-card complaints

If you've had a dispute lately with a credit-card company, you're not alone -- especially if the problem centered on a billing issue, the interest rate charged or how the company reported its action to a credit bureau.

You have lots of company if your spat was with Capital One, Citibank, Chase or Bank of America.

The new federal Consumer Financial Protection Bureau has been compiling credit-card complaints from the public, totaling just under 13,000 nationally over the initial 10 months from Dec. 1, 2011, through Oct. 1, 2012. An Arizona Republic analysis of the 248 problems reported by Arizonans over that period reveals certain trends.

One observation is that not all issues weigh equally as problems in the minds of credit-card customers. Billing disputes accounted for the most complaints lodged by Arizonans over the study period, 10.5 percent, slightly ahead of interest-rate issues (9.7 percent) and credit-reporting spats (9.3 percent).

Cardholders appear pretty satisfied with their rewards, which constituted only 2.8 percent of disputes over the period. Issues with advertising/marketing, privacy, balance-transfer fees and overlimit fees were even less common.

Several other types of disagreements fell somewhere in the middle for frequency, including account closures, collection practices, identity theft/fraud, late fees, credit-line increases/decreases, billing statements and overall customer service.

Another takeaway from the analysis is that four card companies were the targets of two-thirds of all complaints filed by Arizonans. Capital One led the field as the target of 23 percent of all complaints, while Citibank and Chase tied for second with 14.9 percent each. Bank of America was next at 14.1 percent.

Then again, those four firms were the industry's largest last year in terms of outstanding balances, transactional volume and number of accounts, according to information supplied by Capital One. "A principal determinant of the number of complaints ... is the number of accounts the issuer has," said a Capital One spokesperson in an e-mail reply.

Citibank didn't respond immediately for this article. Representatives of Bank of America and Chase indicated their firms seek to work with cardholders to resolve complaints and improve customer service.

Capital One was the target of the Consumer Financial Protection Bureau's first enforcement action in July, when the agency ordered the firm to refund $140 million to 2 million customers and pay a $25 million penalty over deceptive marketing practices for add-on services such as those for payment-protection and credit-monitoring plans.

In September, the Consumer Financial Protection Bureau fined Discover $14 million and ordered $200 million in refunds for 3.5 million customers over deceptive telemarketing and sales practices.

Earlier this month, it slapped American Express with a $27.5 million fine and ordered $85 million refunded to 250,000 customers for illegal card practices touching on everything from marketing and enrollment to payments and debt collection.

However, Arizona consumers have lodged few complaints against Discover or American Express, accounting for just 4 percent and 3.6 percent of the statewide total, respectively. The Wells Fargo total, 6 percent, also was low considering the bank's broad banking reach among consumers in Arizona.

In the latest consumer-satisfaction study by J.D. Power and Associates, American Express finished first for a sixth straight year among credit-card companies, and Discover placed second. In descending order, the remaining companies were: Chase, Barclays, U.S. Bank, Citibank, Wells Fargo, Capital One, Bank of America, GE Capital and HSBC in last place. Capital One purchased HSBC's U.S. card business in May.

If you lodge a complaint, are you likely to get satisfaction from it? That depends on your definition of satisfaction.

In only 11.7 percent of the Consumer Financial Protection Bureau's cases did Arizonans obtain monetary relief such as receiving a refund of a late charge, though it's important to note that people aren't always seeking compensation. Another 28.2 percent of cases were closed with some form of non-monetary relief, such as agreements to stop debt-collection calls. In another 31 percent of disputes, consumers got an explanation for their trouble.

In most of the remaining situations, there was no relief or explanation, although a few cases remain open.

Complaint targets

The percentages of grievances filed against these credit-card firms, of the 248 total from Arizona over the period analyzed:

Capital One, 23 percent; Chase, 14.9 percent; Citibank, 14.9 percent; Bank of America, 14.1 percent; GE Capital, 8.5 percent; Wells Fargo, 6 percent; Discover, 4 percent; American Express, 3.6 percent. Others, 11 percent.

Percentages are based on data compiled by the federal Consumer Financial Protection Bureau.

www.azcentral.com

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