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A look inside the national credit card hotline

By , CardRatings contributor
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The number isn't as catchy as 911 or 411, but for beleaguered credit card holders, 1-855-411-CFPB (2372) could end up being a financial lifeline.

In case you don't know what that last phone number is, that's the direct toll-free hotline to the Consumer Financial Protection Bureau, the brand new Federal agency launched on July 21. If you have a problem related to your credit card and you haven't been able to resolve it with your bank, these are the folks to call. With the holidays coming, and credit card spending presumably going up, you may need to know more about the CFPB hotline.

What the hotline can do

Collect information on credit card complaints. The CFPB invites consumers to call the hotline (or go the website, www.consumerfinance.gov) to file a complaint about unfair, deceptive or abusive credit card practices. If there's a question as to the validity of new credit card terms, an issue with identity theft or a complaint about a deceptive marketing tactic, that's why the CFPB hotline was created.

Help resolve an issue with the bank. The CFPB contacts the credit card issuer on your behalf, presumably using the weight of governmental authority to encourage the bank to respond constructively to your complaint.

Enforce credit card laws. If your bank inexplicably doesn't return your money after your card is stolen, the CFPB can have a talk with the issuer and start an investigation. The bureau has the authority to file lawsuits against a bank and to get the Justice Department involved.

What the hotline cannot do

Investigate small banks. The bureau is allowed to look at the books of approximately 110 banks that have more than $10 billion in assets. If your credit card was issued by Giant Corporate Bank, you have some recourse. If you have a gripe with Ted's Savings 'n Pawn, the CFPB may not be able to help you.

Improve customer service. The hotline won't help you get better service. If you call your credit card's customer service line to your credit card and get someone who you feel isn't the brightest bulb in the pack, the CFPB isn't likely going to help. Likewise, if your issuer has ignored your requests for a lower interest rate or more generous rewards, exercise your right as a consumer and find yourself a better credit card.

Catch credit card thieves. If your credit card information is stolen, the CFPB won't try to track down the thief. But in that unfortunate event, your bank is actually in your corner. Since by law, you're allowed to be on the hook for no more than $50, your credit card company has a vested interest in keeping stolen credit card charges to a minimum. Credit card issuers have become lightning quick in noticing when a card is being used illegally, often contacting the consumer before they're aware they're being fleeced.

What to expect after you call

"Once a complaint is filed, consumers receive a written response acknowledging receipt of their complaint (from the CFPB)," says Jen Howard, spokeswoman for the Consumer Financial Protection Bureau. "The consumer complaints are then referred to the appropriate issuer for review. Following the issuer's timely response to the consumer, the consumer receives additional communication from the CFPB."

In other words, the CFPB will confirm with you that they've received your complaint, then send it to the bank and request a response, then follow up with you after the bank responds. From what the CFPB spokespeople have said in the past, if the charge is serious enough to warrant it, an investigation may be launched. And if your complaint doesn't rise to the level of an investigation, but enough people start complaining, then the CFPB may determine the issuer is doing something wrong and begin looking into the matter again.

Are consumers satisfied?

There were scattered reports in August and September that not all of the complaints to the hotline were reaching the banks. At this writing, complaints about complaints not getting through seems to be a thing of the past.

"Collectively, consumer complaints are being resolved," says Howard. "Our call centers have been handling calls with little to no wait times and consumers are getting directly through. We have received feedback from consumers that they are satisfied with our process and the bank's resolution."

Most common credit card complaints?

The CFPB is collecting data on issues that are reported on the credit card hotline, but the bureau is not yet ready to reveal that information. "We are working on a comprehensive policy to release our complaint data, an issue that has engaged many of our stakeholders," says Howard. "It would be premature to release data in advance of this policy."

The reticence of the CFPB could be due to the fact that the new agency doesn't have an official director, one of whose tasks would presumably be to set the tone for communications with public relations and media who are curious about their ongoing activity.

During a phone press conference last month, Ed Mierzwinski, director of the National Association of State Public Interest Research Groups (U.S. PIRG), lamented that until a director is in place, the CFPB won't have the full authority to regulate the financial laws that it was charged with overseeing.

"The lack of the full authority of the CFPB is harming consumers," says Mierzwinski. That said, he adds that he has been very pleased with the work that they have been able to do.

Beyond credit card complaints

For now, the hotline is just for credit card holders who have gripes, but eventually it will be available for anyone with a complaint about a financial product or service. So if you feel you've been wronged by your mortgage company, for instance, or you have a complaint about an auto loan with your bank, you'll need to wait a while before calling in.

The reported goal is to have the hotline fully functioning by March 2012 for all consumer complaints related to financial institutions.

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