Nearly 41 million Americans have had had their identities stolen. An estimated 2.32 million Americans have been affected by medical identity theft alone. Approximately, 33 million Americans have been the victims of card related frauds. The losses from identity theft exceeds $50 billion every year.
These statistics are exactly why a consumer protection agency was necessary. In this technological age, there is personal information floating around everywhere. The CFPB offers consumers a way to be informed of their rights.
What Does CFPB Stand For?
CFPB stands for the Consumer Financial Protection Bureau. It was founded on July 21, 2011, under the Obama administration. Originally, there were 7 agencies that were in charge of handling consumer’s financial issues. Now rolled into one, the agency is held to a high standard. They are making sure that companies all follow the same standard practices, and punish them when they chose not to do so.
The agency itself hasn’t been around for that long, but it has surely made a large difference in a short amount of time.
What are the Most Common Types of Identity Theft?
- Bank fraud
- Loan or lease fraud
- Government benefits fraud
- Credit card fraud
- Employment or tax-related fraud
- Utilities fraud
What does the CFPB do?
- Educates consumers of their rights…
- Gives financial information to consumers
- Enforces the rules…
- Creates and enforces the rules that protect consumers
- Does not allow companies to target consumers unfairly
- Does not allow unfair, abusive, deceptive, or practices against consumers
- Researches how businesses interact with consumers…
- Monitors all financial markets and institutions
- Logs and addresses consumer complaints
- Researches consumer behavior
Why is the CFPB Needed?
The Consumer Financial Protection Bureau is needed because it provides consumers with much needed financial education tools. The agency provides access to these financial tools creating a fair and transparent business practices. It also holds the financial companies accountable for things that they say and do. Because some financial companies had not been previously regulated, they were able to charge ridiculous amounts of interest and other charges to consumers, and were not penalized for it. This fact greatly contributed to the amount of delinquent consumer debt in the millions of dollars.
The CFPB doesn’t just regulate bank financial institutions, they regulate non-bank financial institutions as well. These regulations will cause a reduction or a complete end, to unfair and misleading business practices.
What Consumer Tools Does the CFPB Offer?
- Auto loans
- Payday loans
- Student loans
- Credit and prepaid cards
- Credit reports and scores
- Bank accounts and services
- Debt collections
- Frauds and scams
- Money transfers
What has the CFPB Accomplished?
- Fined Wells Fargo $185 million, and made them pay consumers $110 million, after a discovery that the company’s employees opened a million accounts and filled out credit card applications without client approval.
- Awarded $12 billion to 29 million American citizens who were victimized by student loans, fake credit card services, etc.
- A financial consumer database where consumers can look up loan companies
How Can I Submit a Complaint?
If you believe that a certain financial institution is being unfair, abusive, or deceptive, etc. you should immediately file a complaint with the CFPB. You can submit a complaint with the agency at any time of day or night via the agency website. You can also call the customer service line between the hours of 8 a.m. to 8 p.m. at 1-855-411-2372.
What is the Takeaway?
Nearly 1 out of 5 Americans, 65 and older has been the victim of some type of financial scam. This is due to the fact that they are targeted because of their ages, and lack of knowledge on scams and how to avoid them. About 29% of people ages 22 to 29 don’t pursue degrees in higher education because of their various debts. The CFPB was combined of several different agencies, into one, to help to dissolve statistics such as these. Every day, the agency works to combat deceptive business practices that out consumers in bad situations. Its main purpose is to increase financial literacy across the country.