American Express had the fewest complaints by purchase volume of
the seven companies -- but it was also the stingiest with credits
and other kinds of payback after receiving a complaint.
Those are among the findings from a CreditCards.com
analysis of the first year's worth of complaints published in a new
database by the U.S. Consumer Financial Protection Bureau. The
agency's detailed records provide a first-ever look at friction
points between card issuers and their customers -- and which
companies are likely to pay back a customer with a gripe. (Article
"We've been advocating since the bureau existed to make this
(complaint) information public," said Ruth Susswein, deputy
director of national priorities at Consumer Action. "There is the
potential that companies would improve, since no one wants to be at
the top of the list."
Capital One disagreed with the conclusion that the company gets
more complaints than competitors for its size. On a per-account
basis, the company's complaint numbers are within the range seen by
other large issuers, a spokeswoman said.
Nationwide, 11 percent of cardholders had some problem with
their credit card in 2012, according to a separate survey by the
analysis firm J.D. Power. That indicates that about 15,000 credit
card complaints filed with the consumer bureau in 2012 are a
relatively small sample of the total discontent out there.
Highest, lowest complaint totals
The consumer bureau began publishing
credit card complaints
on its website -- minus people's names and addresses -- in
Creditcards.com looked at seven card issuers that had
three-quarters of U.S. card purchases by dollar volume.
had the most complaints overall in the federal data and the highest
complaint rate, with about 18 gripes per $1 billion in card
purchases. It was followed by
with 16.5 and
Bank of America
Coming in on the low end of the bunch was
, with fewer than two complaints per $1 billion in card purchases.
were about the middle of the pack, with 6.8 and 5.1 respectively.
Rounding out the seven was U.S. Bank, with 2.8.
Billing disputes topped the list of gripes, followed by interest
rate issues and credit report squabbles. James Miller, director of
banking practice at J.D. Power, said that some complaints are
outside card companies' control. Billing disputes, for example,
usually reflect a disagreement with a merchant -- the card company
is caught in the middle when a customer tries to charge back a
But the consumer bureau is not just taking complaints at face
value. It removes duplicates and verifies that the person is a
customer of the target company. Then the card issuer responds to
the complaint, and the agency tracks the outcome -- including any
credit or other "relief" given to the cardholder. Lastly, the
cardholder can dispute the company's resolution. And most types of
complaints, such as rates, fees and collection practices, have to
do with the card issuer's practices.
Capital One complaints include pre-merger gripes
Capital One's complaints for the year include ones that were
originally aimed at HSBC, whose U.S. card business it bought in
May. That sale throws a twist into the comparison. Capital One now
owns the business that generated HSBC complaints, but its practices
weren't to blame for HSBC customers' grumbling before the sale. Our
analysis added HSBC's estimated purchase volume to Capital One's
purchase volume, to go with the added complaints from HSBC.
Comparing companies' size another way yields different results,
Capital One spokeswoman Pam Girardo said. When comparing total
accounts instead of purchase volume, Capital One is "comfortably
inside the range experienced by the other four largest banks," she
said in an email response to questions. "That said, we take all
concerns and complaints very seriously, and are constantly working
CreditCards.com used cardholders' purchase dollars as a
yardstick because customer totals do not consider the different
ways people use their cards. Most people have several credit cards
-- some of which get a heavy workout while others rarely see a
Miller of J.D. Power said that different types of customers are
also a factor when it comes to generating complaints, not just the
sheer number of customers or how heavily they use their cards.
"I would suspect it has to do with their customer base," Miller
said of differences between the top and bottom of the list.
American Express has more high-credit score users than competitors,
who are less likely to run into late fees, collection disputes,
over-limit fees and other friction-causing issues, he said. In J.D.
Power's surveys of card customer satisfaction, American Express has
taken the top spot for six years running.
Also, companies with many new customers get more complaints than
those with more long-term customers, who are used to how the
company does things. That's a plus for American Express and
Discover, Miller said, while it works against Capital One, whose
ubiquitous ads bring in a stream of new cardholders.
The federal data provides a detailed look at the types of
problems that card issuers are having with customers, in addition
to the total numbers of problems. Looking at complaints by issue,
Capital One has fewer problems with rewards than either Bank of
America or Citibank, per dollar of purchases. It also trails
Citibank in billing disputes and interest rate hassles.
Who is generous, tightfisted with relief
How do all these complaints pan out for customers? When you look at
how generous -- or tightfisted -- companies are after a complaint
comes in, a different picture emerges.
At American Express, only 27 out of 100 unhappy customers got
some sort of concession -- either a credit to their account or a
non-financial benefit, such as a change in account terms or a
correction on their credit report. That rate was below the median
for the group of major card issuers examined.
Overall, 38 percent of complainers got some kind of payback. Not
surprisingly, customers also disputed American Express's
resolutions more often than other companies -- 24 percent said they
disagreed with the company's resolution, according to the complaint
database, the highest rate of the seven large issuers.
Who was the most tightfisted with relief? Of the 12 card issuers
examined in this group, Navy Federal Credit Union gave concessions
just 18 percent of the time, the federal complaint data
Credit unions generally crow about their customer service, and
the Virginia-based credit union that serves Defense Department
workers is no exception.
"The fact of the matter is, we receive significantly fewer
complaints than most other major financial institutions," spokesman
Raleigh Miller said in an email response to questions. Without
addressing the question of credit card relief directly, he said
that Navy Fed scored high in an independent
survey of customer satisfaction
Other card companies had little to say about complaints and
resolutions. American Express said in an email that its process for
handling complaints is part of its dedication to providing top
service. Chase Bank has a program where top managers look at
complaints and other issues to see how to improve customer
satisfaction, a spokesman said by email.
Complaint trend is down
Problems with credit cards overall have been on a downswing for the
past few years, since the
Credit CARD Act of 2009
, Miller of J.D. Power said. The law, whose major provisions took
effect in 2010, capped late fees and over-limit fees and put tight
restrictions on surprise rate increases. J.D. Power's survey
indicated that 11 percent of cardholders had issues last year, down
from 18 percent in pre-CARD Act 2009.
"Less than 2 percent of customers have a complaint around fees,"
he said. Complaint totals in 2012 pointed to trouble spots with
collection problems, identity theft and credit reporting hassles,
in addition to interest rates.
She was hesitant to draw conclusions about which companies
provide better service. Comparing companies based on their
customers' purchase volume -- as our analysis does -- puts
companies that have wealthier customers in a better light. Even so,
being at the top of the complaint list "certainly doesn't look
good," she said.
Over time, airing complaints publicly this way could put
pressure on companies to correct problems that people have with
cards -- if the consumer bureau provides more details about the
reasons people have for being miffed. "They are intent on making
this useful," she said. "I think they just need to keep going."
Credit card complaints reveal trouble hot spots
Federal agency opens credit card complaints to