Meet the most complained-about financial firm in America

Last Updated Apr 26, 2017 12:44 PM EDT

When it comes to customer complaints, one financial company has the unfortunate distinction of standing far above the rest. 

Student-loan company Navient ranks as the most-complained-about financial services company in America, according to a new report from the Consumer Financial Protection Bureau. Its consumer complaint database is designed to help customers get a response from their lenders and banks, but it also provides a snapshot of which types of loans and services are sparking the most angst.

It may be no surprise that student loan debt has leapfrogged to the top of the complaint list, since the amount of outstanding debt has surged in recent years to a whopping $1.4 trillion. Navient was sued by the CFPB earlier this year for allegedly using “shortcuts and deception to illegally cheat struggling borrowers out of the rights to lower payments.” 

“Student loan servicers play an important role in helping millions of people manage the loans they take out to pursue an education,” said CFPB director Richard Cordray in a statement. “Unfortunately, borrowers continue to report difficulties and setbacks as they try to work with their servicers to manage their loan debt.”

Navient saw the greatest percentage increase in monthly average complaint volume between two three-month periods a year apart, Nov. 2015-Jan. 2016 to Nov. 2016-Jan. 2017. It’s possible the spike in complaints was sparked by awareness of the CFPB’s lawsuit, which was filed in January 2017. 

Complaints against Navient surged more than 800 percent during those time periods, reaching a three-month average of 1,439 complaints for the most recent three-month period, the CFPB said. 

Almost two-thirds of all student loan complaints were related to poor information and sloppy practices, such as consumers objecting when their monthly student loan payments were misapplied by their servicers. Others complained their firms pushed them into plans that suspend repayment and result in their interest payments piling up. 

Some said their servicers failed to tell them about income-driven repayment plans, which help consumers having difficulty repaying their loans. 

Navient took issue with the report, and said it’s working with ways to improve its service. 

“In a recent analysis, we found that many issues are related to federal loan policy, so we use the feedback to propose policy changes, including recommending allowing servicers to provide a courtesy credit bureau fix, create a private loan rehabilitation program, and bankruptcy reform,” Navient spokeswoman Patricia Nash Christel wrote in an email. “Just as importantly, we also use customer feedback to enhance our customer service, such as rolling out a new website and phone system.”

The complaints filed with the bureau tie into the CFPB’s lawsuit, which alleges that Navient guided struggling borrowers into forbearance, or a temporary break from repayment, rather than more favorable income-based repayment plans. Interest continues to grow when a borrower is in forbearance, which can lead to hardship for workers in low- or moderate-income households. (Navient has refuted the lawsuit’s allegations.)

Loans that are in forbearance are easier and quicker for student-loan servicing companies to process, which means it’s cheaper for them to handle, the agency alleged. 

The second, third and fourth-most complained about financial companies are the credit-reporting agencies, Equifax, Experian and TransUnion, according to the CFPB. 

Wells Fargo (WFC) was the fifth-most complained about business. Under a sales-driven culture, the bank’s employees opened millions of fake accounts without their customers’ consent, leading to a management shakeup and fines.