Data released by the Better Business Bureau on Thursday reveals that consumer complaints against payday lenders have more than doubled since last year, while complaints against banks fell by approximately 30 percent from 2010.
The data tracks complaints in more than 4,000 different industry categories. There was a six percent increase in the number of overall complaints in 2011, but some areas of the industry saw higher numbers, Reuters reports.
“To me, the overwhelming story here is that the numbers [of complaints] are small compared to how criticized the banks have been over the past 36 months,” a Jaret Seiberg, senior policy analyst at Guggenheim Securities’ Washington Research Group, said, according to Reuters.
Seiberg said that, given the number of new regulations that banks have had to comply with recently, the numbers are low.
“As the industry copes with Dodd-Frank, debit card limits, and with new mortgage rules – despite these serious operations changes, complaints are still coming down,” Seiberg said, according to Reuters.
Complaints against payday lenders, however, rose by 162 percent. Jean Ann Fox, the director of financial resources with the Consumer Federation of America, said that consumers are likely contacting the BBBs with complaints because of difficulties reaching online payday lenders.
Credit card-related complaints fell by 28 percent and complaints against mortgage lenders decreased by 31 percent. Kathleen Day, a spokeswoman for the Center for Responsible Lending, said that the drop in mortgage-related complaints could be due to a decrease in the number of mortgage loans in 2011 or the Federal Reserve’s rule that prohibits lenders from boosting pay by charging higher interest rates.
“Through some of this new regulation, there has been more focus on disclosures of what consumers are getting and with that clarity on the front end you are going to see a decline in the complaints,” Cary Hurt, the CEO of the Council of Better Business Bureaus said, Reuters reports.