$33M in Refunds, 26K Complaints: Why Lenders Can’t Afford Oversight Gaps

The Federal Deposit Insurance Corp. (FDIC) received more than 26,000 consumer complaints about problems with banks, credit cards, and other financial services last year, a jump of 14% from 2023 to 2024.

As a result, FDIC-supervised institutions paid $33.3 million in voluntary restitution payments to about 400,000 consumers for various consumer protection law violations. 

Rising FDIC complaints — especially involving credit cards, loans, and third-party providers — signal tighter oversight that could put subprime lenders in regulators’ crosshairs.

Credit cards caused the most frustration. Nearly one-third of the complaints involved credit cards. The most frequent issues were conflicts involving credit reports (18%). Some consumers said their reports included accounts they never applied for. Others couldn’t get errors fixed, no matter what they tried.

Consumers also complained about checking accounts, installment loans, and residential real estate loans. Many were upset about unexpected checking accounts fees or accounts being shut down.

Installment loan complaints often involved credit report errors or unclear fine print.

Third-Party Providers: An Increasing Risk

Third-party providers (TPPs), outside companies that banks hire to handle credit card servicing, payment processing, and other services, also appeared in complaints. In 2024, more than 4,200 of the complaints involved one of these providers — up 13% from the year before.

In several of those cases, the FDIC found possible consumer protection violations. In fact, 116 of the TPP-related cases involved identified violations of federal consumer protection laws. That tends to happen when the provider fails as the bank’s agent which means outsourcing can backfire when oversight slips.

Errors and Refunds

The FDIC flagged 305 cases in which the institutions clearly made mistakes. It also identified 132 likely violations of federal consumer protection laws.

“In addition to monetary compensation, the CRU’s efforts resulted in 937 cases resulting in non-monetary compensation,” according to an FDIC report.

Non-monetary compensation included updating credit reports, updating bank records, reinstating an account or releasing a block on a card, ceasing collection calls or actions, forgiving debt, and granting loan modifications, according to the report.

Total refunds were lower than the year before because one major case from 2023 made up most of that year’s total. Even so, the number of complaints in 2024 shows that many people are struggling to receive fair treatment.

A Wake-Up Call to Subprime Lenders

All the noise around credit cards and credit reports may signal a broader trend. Subprime lenders — those serving people with lower credit scores — may be especially vulnerable.

These customers are more likely to face service issues or see mistakes on their credit reports. That could lead to even more complaints if businesses don’t act quickly to fix issues.

Even though 97% of the banks passed their compliance exams, the increase in complaints sends a clear message. People are paying attention. And the regulators? They’re watching even more closely.