Global fintech and funding innovation ecosystem

Consumer Protection: Fintech Complaints Have Been Rising

Protocol | Ryan Deffenbaugh and Fintech team | Aug 29, 2022

consumer complaints - Consumer Protection:  Fintech Complaints Have Been Rising

Image: Unsplash/Gabriel Gonzalez

The CFPB received 20,900 complaints last year involving money transfer services (including mobile and digital wallets) and virtual currency companies, the category most closely associated with fintech. That marked a 63% increase from a year earlier, even if they amount to just a small part of the nearly 1 million complaints to the agency, the majority of which involve credit-reporting companies.

  • In response to complaints of fraud on peer-to-peer money-transfer services, the CFPB has promised new guidance "ensuring that financial institutions are living up to their investigation and error-resolution obligations," a CFPB spokesperson told the Wall Street Journal last month. That could include requiring refunds for fraudulent transfers, according to the Journal, which the industry warns could lead to higher costs or even encourage more fraud.

See:  Some New Banking Rules Implemented to Protect Consumers in Canada

  • The guidance could address a common complaint flagged by the CFPB’s 2021 annual report. Customers trying to report issues such as fraudulent activity to money-transfer services "described no response to support tickets — and no way of contacting the company by phone.”
  • Some fintechs have promised to improve their responsiveness to customers. Both Coinbase and Robinhood added live phone support last fall. Block offers a phone line for Cash App and told Bloomberg in March that it is committed to “expanding our customer support and operations infrastructure.”

California is building its own mini CFPB

  • The state's Department of Financial Protection and Innovation is reviewing comments on a rule-making proposal that would dictate how some of the financial and fintech companies under its jurisdiction, such as lenders and debt collectors, respond to customer complaints.
  • While acknowledging the importance that companies respond to complaints, some within the industry have called out requirements such as quarterly reporting and responding to telephone-based complaints within 24 hours as particularly onerous, and beyond what is required by other regulators.

See:  Penrose Report: Power to the People: Stronger Consumer Choice and Competition

  • Documents published about the rule noted that the DFPI was required to set new rules for companies to handle complaints and disputes as part of new authority granted under the 2020 California Consumer Financial Protection Law.

Continue to the full article --> here

NCFA Jan 2018 resize - Consumer Protection:  Fintech Complaints Have Been RisingThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

Latest news - Consumer Protection:  Fintech Complaints Have Been RisingFF Logo 400 v3 - Consumer Protection:  Fintech Complaints Have Been Risingcommunity social impact - Consumer Protection:  Fintech Complaints Have Been Rising

Support NCFA by Following us on Twitter!

NCFA Sign up for our newsletter - Consumer Protection:  Fintech Complaints Have Been Rising


Leave a Reply

Your email address will not be published. Required fields are marked *

four × five =