Capital One got hit by the most complaints from its customers of seven major U.S. card companies in 2012, according to an analysis of newly public complaint figures.
American Express had the fewest complaints by purchase volume of the seven companies -- but it was also the stingiest with credits and other kinds of payback after receiving a complaint.
Those are among the findings from a CreditCards.com analysis of the first year's worth of complaints published in a new database by the U.S. Consumer Financial Protection Bureau. The agency's detailed records provide a first-ever look at friction points between card issuers and their customers -- and which companies are likely to pay back a customer with a gripe. (Article continues below.)
"We've been advocating since the bureau existed to make this (complaint) information public," said Ruth Susswein, deputy director of national priorities at Consumer Action. "There is the potential that companies would improve, since no one wants to be at the top of the list."
Capital One disagreed with the conclusion that the company gets more complaints than competitors for its size. On a per-account basis, the company's complaint numbers are within the range seen by other large issuers, a spokeswoman said.
Nationwide, 11% of cardholders had some problem with their credit card in 2012, according to a separate survey by the analysis firm J.D. Power. That indicates that about 15,000 credit card complaints filed with the consumer bureau in 2012 are a relatively small sample of the total discontent out there.
Highest, lowest complaint totals
The consumer bureau began publishing credit card complaints on its website -- minus people's names and addresses -- in mid-2012.
Creditcards.com looked at seven card issuers that had three-quarters of U.S. card purchases by dollar volume. Capital One had the most complaints overall in the federal data and the highest complaint rate, with about 18 gripes per $1 billion in card purchases. It was followed by Citibank with 16.5 and Bank of America with 10.5.
Coming in on the low end of the bunch was American Express, with fewer than two complaints per $1 billion in card purchases. Discover and Chase were about the middle of the pack, with 6.8 and 5.1 respectively. Rounding out the seven was U.S. Bank, with 2.8.
Billing disputes topped the list of gripes, followed by interest rate issues and credit report squabbles. James Miller, director of banking practice at J.D. Power, said that some complaints are outside card companies' control. Billing disputes, for example, usually reflect a disagreement with a merchant -- the card company is caught in the middle when a customer tries to charge back a purchase.
"Whatever the customer thinks is a complaint is a complaint, if they're frustrated enough to put it in the system," he said. "It's sort of a squishy world out there."
But the consumer bureau is not just taking complaints at face value. It removes duplicates and verifies that the person is a customer of the target company. Then the card issuer responds to the complaint, and the agency tracks the outcome -- including any credit or other "relief" given to the cardholder. Lastly, the cardholder can dispute the company's resolution. And most types of complaints, such as rates, fees and collection practices, have to do with the card issuer's practices.
Capital One complaints include pre-merger gripes
Capital One's complaints for the year include ones that were originally aimed at HSBC, whose U.S. card business it bought in May. That sale throws a twist into the comparison. Capital One now owns the business that generated HSBC complaints, but its practices weren't to blame for HSBC customers' grumbling before the sale. Our analysis added HSBC's estimated purchase volume to Capital One's purchase volume, to go with the added complaints from HSBC.
Comparing companies' size another way yields different results, Capital One spokeswoman Pam Girardo said. When comparing total accounts instead of purchase volume, Capital One is "comfortably inside the range experienced by the other four largest banks," she said in an email response to questions. "That said, we take all concerns and complaints very seriously, and are constantly working to improve."
CreditCards.com used cardholders' purchase dollars as a yardstick because customer totals do not consider the different ways people use their cards. Most people have several credit cards -- some of which get a heavy workout while others rarely see a swipe reader.
Miller of J.D. Power said that different types of customers are also a factor when it comes to generating complaints, not just the sheer number of customers or how heavily they use their cards.
"I would suspect it has to do with their customer base," Miller said of differences between the top and bottom of the list.
American Express has more high-credit score users than competitors, who are less likely to run into late fees, collection disputes, over-limit fees and other friction-causing issues, he said. In J.D. Power's surveys of card customer satisfaction, American Express has taken the top spot for six years running.
Also, companies with many new customers get more complaints than those with more long-term customers, who are used to how the company does things. That's a plus for American Express and Discover, Miller said, while it works against Capital One, whose ubiquitous ads bring in a stream of new cardholders.
The federal data provides a detailed look at the types of problems that card issuers are having with customers, in addition to the total numbers of problems. Looking at complaints by issue, Capital One has fewer problems with rewards than either Bank of America or Citibank, per dollar of purchases. It also trails Citibank in billing disputes and interest rate hassles.
Who is generous, tightfisted with relief
How do all these complaints pan out for customers? When you look at how generous -- or tightfisted -- companies are after a complaint comes in, a different picture emerges.
At American Express, only 27 out of 100 unhappy customers got some sort of concession -- either a credit to their account or a non-financial benefit, such as a change in account terms or a correction on their credit report. That rate was below the median for the group of major card issuers examined.
Overall, 38% of complainers got some kind of payback. Not surprisingly, customers also disputed American Express's resolutions more often than other companies -- 24% said they disagreed with the company's resolution, according to the complaint database, the highest rate of the seven large issuers.
Who was the most tightfisted with relief? Of the 12 card issuers examined in this group, Navy Federal Credit Union gave concessions just 18% of the time, the federal complaint data indicated.
Credit unions generally crow about their customer service, and the Virginia-based credit union that serves Defense Department workers is no exception.
"The fact of the matter is, we receive significantly fewer complaints than most other major financial institutions," spokesman Raleigh Miller said in an email response to questions. Without addressing the question of credit card relief directly, he said that Navy Fed scored high in an independent survey of customer satisfaction.
Other card companies had little to say about complaints and resolutions. American Express said in an email that its process for handling complaints is part of its dedication to providing top service. Chase Bank has a program where top managers look at complaints and other issues to see how to improve customer satisfaction, a spokesman said by email.
Complaint trend is down
Problems with credit cards overall have been on a downswing for the past few years, since the Credit CARD Act of 2009, Miller of J.D. Power said. The law, whose major provisions took effect in 2010, capped late fees and over-limit fees and put tight restrictions on surprise rate increases. J.D. Power's survey indicated that 11% of cardholders had issues last year, down from 18% in pre-CARD Act 2009.
"Less than 2% of customers have a complaint around fees," he said. Complaint totals in 2012 pointed to trouble spots with collection problems, identity theft and credit reporting hassles, in addition to interest rates.
Susswein said the complaint data could become a useful tool for selecting a card -- but she doesn't think it is there yet. The bare numbers don't explain the problems that caused the complaints, she said. "To make it useful for the average customer, we'd like to see the actual complaint, or a summary."
She was hesitant to draw conclusions about which companies provide better service. Comparing companies based on their customers' purchase volume -- as our analysis does -- puts companies that have wealthier customers in a better light. Even so, being at the top of the complaint list "certainly doesn't look good," she said.
Over time, airing complaints publicly this way could put pressure on companies to correct problems that people have with cards -- if the consumer bureau provides more details about the reasons people have for being miffed. "They are intent on making this useful," she said. "I think they just need to keep going."