I stumbled upon this Complaint Database on the Consumer Financial Protection Board (CFPB) website and thought it would make a great activity for students while also increasing their “street smarts” regarding common complaints with financial service firms.

So, here’s an idea on how to create an activity using this database:

• First, have students select a product.  Go to column titled Product, put cursor over Menu (right hand side of Product column) and click on it.  On drop-down menu, select Filter and choose one of Product categories.  Here’s a graphic:

• Here are product categories that they can choose from:

1. Bank account or service
2. Consumer loan
3. Credit card
4. Credit reporting
5. Debt collections
6. Money transfers
7. Mortgage
8. Other financial service
9. Payday loans
10. Prepaid card
11. Student loan

• Once they have selected a specific product (one of the 11 choices above; encourage them to choose one that they are familiar with) and they filter by that Product, they should eyeball the database and identify 3-4 of the most common issues that seem to arise with that product (see ISSUES column).
  • For example, if they filtered by Student Loans, they would see that “Can’t repay my loan” and “Dealing with my lender or servicer” are two of the more common complaints that arise.
  • If they filtered by Credit Card, they would see complaints like “APR or Interest Rate,” “Identity Theft/Fraud/Embezzlement,” “Billing Disputes” or “Billing Statement” to name just a few.

• Now that they have the most common 3-4 complaints for a given Financial Product, their job is to choose 2 of these complaints and research how they could have prevented the complaint from being flied in the first place.  In other words, how would they have tried to educate the complainant to prevent them from having this specific issue.  Here is an example:
  • Student chooses “APR or Interest Rate” as the complaint for Credit Cards.  The student’s research might have included the following:
    • Defined the terms used in the complaint, in this case, APR.  Also, might include the calculation of how APR is applied to the outstanding credit card balance to determine the interest payment.
    • Indicated how credit card companies are required to disclose APR in a disclosure statement (“Schumer Box”) that comes with their new card. They might even provide an example of such disclosure.
    • Identified the common credit card company practice of increasing the APR if the cardholder makes a late payment.  This higher rate often remains in effect indefinitely which may surprise many cardholders who presume the rate will decline once they get back making on-time payments.
    • Describe how all terms (including APR and interest rate) are subject to change, so card companies can increase rates (with sufficient notice, I believe).  This might surprise many consumers who suddenly see a rate increase and think it must be a mistake.

Here is why I think this is a great exercise:

• Helps students understand most common issues with popular financial products
• Asks students to think creatively about how to educate consumers about these products to prevent them from having problems in the first place
• Requires students to have depth of understanding of both concepts and key terms in order to educate others
• Develops student research skills

Good luck!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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