Some Issuers Not Delivering on COVID Relief, CFPB Reveals –

  • August 18, 2020
  • By: Greenpath Financial Wellness

Excerpt from features GreenPath’s Jeremy Lark and steps to take when issuers fail to offer mandated relief.

As the pandemic continues, many have reached out to their credit card issuers about getting help but have come up short from those issuers not delivering COVID relief.

Unfortunately, consumers have submitted complaints to the Consumer Financial Protection Bureau that help has not been forthcoming.

Consumers reveal that issuers are not implementing the terms of their deferment programs as they had advertised. They are worried about the impacts on their credit report.

For instance, issuers may not be waiving interest, or they may be providing two months’ relief after promising three. Consumers also say that their account statements don’t show them participating in the relief programs. In addition, many say late fees have been charged which the federal government had waived during the deferral period.

Issuers not keeping their promises

The CFPB reports that consumers have submitted more than 187,000 complaints to it through May 2020, of which more than 8,000 directly mention coronavirus issues.

From March through May, complaints that cite credit cards made up 18% of coronavirus complaints received, with credit reporting issues making up another 18% of the coronavirus-based complaints.

As noted in a sample case from CFPB regarding a retail store credit card, the issuer “states they offer 90 days relief due to COVID-19, but will only defer 2 monthly payments. I spoke with [an] employee … who informed me there is nothing they can send me in writing outlining the terms of [the issuer’s] COVID-19 relief program, or that my 90 days relief had been used, that they could only send me another copy of my statement. The pandemic is still ongoing, hundreds of thousands of people are still out or work, and [the issuer] does not have anything in writing to provide their customers who theyre offering 90 days/3 months relief to, but in all actuality are providing 60 days and demanding the 3rd monthly payment.”

What to do if issuers promise but don’t perform

When issuers don’t deliver COVID relief, the publication asked GreenPath how consumers confront issuers about such lack of performance.

Jeremy Lark, senior manager of client services for GreenPath, a credit counseling firm, advises, “Agreement terms can vary. It is important for borrowers to take notes and keep careful records of any interactions they have with their card issuer and ask for written confirmation of agreements or any other type of assistance they receive. If an issue is spotted, we recommend following up directly with the card issuer to bring the matter to their attention and ask for them to relief is not automatic.”

Don’t assume you will get relief automatically, as it seems some consumers have. You will have to contact your issuer to proactively seek out the relief.

According to the FDIC, it is encouraging banks to be understanding and work with customers seriously impacted by the coronavirus, including business slowdowns, shutdowns or sickness. In certain situations, the FDIC is even encouraging banks to let customers miss loan payments without negative consequences for the borrower, extend their loan terms, and modify loans. The FDIC advises consumers, “However, before skipping payments or otherwise operating in a manner that differs from the terms of a loan, contact your bank to determine its flexibility during this time.”

GreenPath has also heard that some consumers were confused by the relief they were provided or did not understand the terms.

“It’s crucial that borrowers fully understand the details of any arrangements they make with their creditors before agreeing,” Lark said. “This better prepares the borrower to make a plan for how to handle the debt when the deferment period ends.”

What to know if you request relief

If you ask your issuer for help, you should be aware of how the creditor will report to the credit bureau; if it will continue to charge interest during the deferment period; and how it will deal with the paused payments at the end of the deferment period.

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Jeremy Final

Jeremy Lark is dedicated to combating financial strife and stress through financial wellness, education, and technology. Through his work as Senior Manager of Client Services, he has helped GreenPath’s clients find the tools and resources they need to turn their lives around. Jeremy has been with GreenPath for 12 years, and while a born-and-bred Yooper, currently resides in the Detroit area.