Now that I am officially an "older" consumer — at least based on this report's criteria — I can offer firsthand confirmation that predatory lending and a poorly monitored debt collection industry are both alive and well in Florida.
That's why a 35-page report issued Thursday — Older Consumers in the Financial Marketplace — that looks at financial complaints filed by folks 62 and older to the federal Consumer Financial Protection Bureau resonates more to me now than it might have a decade ago.
The report analyzes specific complaints sent to the CFPB from older consumers nationwide. It's no shock that the 8,469 complaints from older Florida consumers was second in volume only to the 10,986 from California, a state with nearly twice the population of this one.
The report is a collaboration of the U.S. Public Interest Research Group and the Frontier Group public policy firm. The report's part of a series of analyses looking at how consumers are dealing with the changing U.S. financial industry. The collapse of the financial industry in 2008 sparked Wall Street failures, forced mergers of major Wall Street investment firms like Merrill Lynch and others, and saw the Dow Jones Industrial Average plummet in March 2009 close to 7,000.
The CFPB was established in 2011 as a federal response to consumers needing more help dealing with volatile and often unfriendly financial markets and firms. Now that the economy has strengthened and the Dow has rebounded dramatically, trading this past week above 22,000, the Trump administration is eager to do away with or at least sideline the influence of the CFPB via newly proposed legislation.
This report aims, in part, to justify the value and preserve the clout of the CFPB for consumers. But that's a political agenda for another story. The latest report also has valuable insights for older consumers dealing with their financial affairs. Among the report's key findings:
• Mortgages, notably existing mortgages, account for 31 percent of complaints by older consumers.
• Among older consumers, 5 percent of mortgage complaints relate to reverse mortgages, loans solely available to older consumers that allow them to use their home equity as security. Understanding reverse mortgages can be tricky. Remember those TV ads with spokesmen like Fred Thompson and Tom Selleck earnestly pitching reverse mortgages? The CFPB has taken action against reverse mortgage companies (including the one featuring these actors) for misleading consumers about risks.
• Older consumers often report inaccurate debt appearing on their credit reports, including medical debt.
• Most debt collection complaints assert either inaccurate debt, or mistreatment by the debt collector.
Adding to recent concerns, if you have a credit report, there's a chance you're one of the 143 million U.S. consumers whose sensitive personal information was exposed in a data breach earlier this year at Equifax, one of the nation's three major credit reporting agencies.
"After the Equifax data breach, we looked closely at complaints from older Americans about credit reporting companies," states Gideon Weissman of Frontier Group, the report's co-author. "We found that for older consumers, credit reporting is the second-most complained about type of financial product. And two thirds of those complaints allege inaccuracies on credit reports."