Consumers’ Basic Bank Account Complaints and Their Financial Hardships: A Content Analysis of Complaints filed with the Consumer Financial Protection Bureau (CFPB)

Abstract

Although savings and/or checking account ownership is widespread, significant account problems occur that carry negative implications for consumer finances. This study aims to profile American consumers’ bank account experiences when they encounter challenges with the use of their basic bank account that are not resolved through initial contact with their financial institution. A systematic sample of consumer saving and checking account complaints submitted to the Consumer Financial Protection Bureau in 2022-2023 is used to conduct content analysis to identify prevalent themes. The resulting content analysis categories are used in a predictive model to determine the drivers of financial hardship.  Results suggest that experiencing fraud issues and Automatic Teller Machine (ATM) malfunctions led to increased odds of experiencing financial issues. Also problematic were challenges relating to funds withheld by the financial institution, account transaction issues, and problems with account features. Customer service issues that led to increased odds of financial hardship were staff’s inability to solve their customer issues, weak engagement with their customers, and lack of or wrong information provided to their customers. Financial institutions can use these results to focus on the most critical issues that negatively impact customer finances. Policy changes to financial institutions, both internal and external, can focus on decreasing the rate and implications of fraud and ATM challenges on consumer finances. Internally, improving customer service in several key areas through rigorous training to standards and monitoring as well as enhanced grievance procedures, may also be impactful.