This week the student loan organization, Lend EDU, published a report that details virtual currency company complaints are up 5,971 percent this year according to data pulled from the U.S. Consumer Financial Protection Bureau database.
Determining Virtual Currency Consumer Complaints
Bitcoin and virtual currencies have been extremely popular this year and have grown immensely in value. This has led to more mainstream cryptocurrency usage and digital currency businesses being swamped by new customers. With more clientele, bitcoin-based companies see more complaints regarding things like; lack of customer service and people having difficulties with verification processes. Lend EDU, an online educational lender, analyzed the CFPB Consumer Complaint Database back in January of this year to “determine if consumers were complaining about virtual currency and Bitcoin to the CFPB.”
Virtual Currency Transactions Account for 0.0019 Percent of the Total Complaints Received
At the time the researchers examined a total of 689,000 complaints sent to roughly 3,000 companies. In that report, they found only seven complaints that referenced “virtual currency.” Of the 689,000 complaints only 0.01 percent were related to cryptocurrency companies among businesses dealing in mortgages, consumer loans, money transfers, and other financial services. So Lend EDU decided to revisit the study from January of 2017 to August 2016 by pulling data from the CFPB database.
“On August 26th, 2017 we pulled the CFPB Consumer Complaint Database and found 145,948 complaints from 2,731 different companies,” explains the Lend EDU report. “So far in 2017, we identified 277 complaints labeled under Virtual currency.”
In 2017, Virtual currency transactions account for 0.0019 percent of the total complaints received by the CFPB. The CFPB is on pace to receive 425 complaints in 2017, up 5,971 percent from the seven complaints received in 2016. However, it should be noted that some complaints related to Virtual currency may not be receiving the appropriate tagging within the database.
Coinbase Holds a Large Majority of CFPB Consumer Complaints
In addition to the latest study, the San Francisco-based company Coinbase is listed as holding the lion’s share of CFPB’s consumer claims. Lend EDU’s analysis says Coinbase is historically tagged inappropriately but still has a lot of records in the database.
“Coinbase received a total of six complaints in 2016. In 2017, there have been 288 complaints against Coinbase,” the report details. “Coinbase is on track to receive 442 complaints in 2017, up 7,288 percent from 2016.”
Other Financial Service Complaints Eclipse Grievances With Virtual Currency Companies
Lend EDU also notes that the CFPB had warned consumers about virtual currencies three years ago. At the time, CFPB Director Richard Cordray told consumers they were stepping into the ‘Wild West’ when they engage in the market.”
Even though virtual currency complaints have risen by 418 recorded incidents this year, out of all the financial markets, it is extremely small. For instance, mortgage operations and other banking services account for upwards of 21 percent or over 40,000 complaints per sector. Further, the CFPB merely records the complaint data and does not consider all the facts Lend EDU concludes in its report.
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