Jacob Wascalus - Community Development Project Manager
Published April 1, 2013 | April 2013 issue
One question that representatives of the Federal Reserve Consumer Help (FRCH) department answer regularly is, What should people do with currency that’s been defaced or damaged?
“There are a lot of people with torn or waterlogged, moldy bills,” says FRCH representative Rachel Lynch, “and they don’t know what to do with them.”
Each year, FRCH fields this question—or a variation of it—scores of times. The department, launched in 2007, is the Federal Reserve System’s centralized inquiry- and complaint-intake function, charged with assisting people who have a problem related to their financial institution or a question or concern of a financial or banking nature, such as whether a bank must cash checks for noncustomers. (The answer is no.) FRCH service representatives either answer the question directly or refer the consumer to the appropriate regulator who can resolve it. In 2012, the department received more than 39,000 complaints and inquiries on topics ranging from overdraft fees to the sometimes byzantine mortgage foreclosure process. FRCH also answers inquiries outside of its consumer protection purview, such as the aforementioned question about defaced or damaged currency. To get a better understanding of common consumer inquiries, Community Dividend asked FRCH for a list of its most frequently asked questions, which are presented below.
Q: How do I file a complaint about my bank?
A: A consumer may file a formal complaint against a financial institution for any number of reasons, such as poor customer service, excessive fees, or contract issues. FRCH provides four ways to file a complaint:
All complaints submitted to FRCH are acknowledged within 15 business days and forwarded to and investigated by the regulatory agency tasked with overseeing the financial institution’s compliance with federal consumer protection laws. These regulators include the Federal Reserve System’s banking supervision function, the Consumer Financial Protection Bureau, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. Complaints involving financial institutions supervised by the Federal Reserve System are resolved within 30–60 days; complaint-resolution time frames for other regulators may differ.
FRCH also helps consumers with questions about completing the online complaint form, navigating the FRCH web site, or following the complaint-intake process. FRCH operates weekdays from 8:00 a.m. to 6:00 p.m. Central time and its Interactive Voice Response service, an automated phone service that allows consumers to leave a message or hear answers to frequently asked questions, is available 24 hours a day.
Q: Why was my loan denied? or Why did I receive a loan denial letter?
A: Consumers who receive notices from their financial institutions stating that their loan applications have been denied often contact FRCH for more information, either because they seek to understand why the application was denied or because they received a denial notice without having knowingly applied for a loan from that financial institution in the first place. To address the former inquiry, FRCH informs the consumer that the Federal Reserve does not influence financial institutions’ lending decisions, nor does it have any information about the application in question. For the latter inquiry, FRCH explains that when a consumer applies for a loan through a business, such as financing for a car through an automobile dealership, the business will often send out loan applications on the consumer’s behalf to multiple financial institutions, some of which may deny the loan. By law, financial institutions supervised by the Federal Reserve System are required to include FRCH’s contact information on their denial letters to ensure that consumers know where to file formal complaints. When FRCH receives these inquiries, it suggests that the consumers contact the financial institution that denied the credit application for more information.
Q: How do I reach my financial institution or the agency supervising my financial institution?
A: If consumers wish to contact their financial institutions about a banking matter—to inquire about a bill or default notice they’ve received, for example—but don’t know the phone number or address, FRCH representatives direct them to accurate contact information. Likewise, FRCH provides consumers with contact information for federal and state financial regulatory agencies.
Q: How do I order a free credit report? and How can I correct information on my credit report?
A: Consumers are entitled to one free credit report per year from each of the three national consumer reporting agencies—Equifax, Experian, and TransUnion—and can request the reports by visiting www.annualcreditreport.com. Consumers also have a right to free credit reports under other specific circumstances, such as when a financial institution denies them credit based on information in their credit reports. In such cases, the name of the credit reporting agency used by the financial institution will appear on the denial notice.
Consumers wishing to correct information on their credit reports should contact the credit reporting agency in question or the financial institution providing the inaccurate information to the credit reporting agency. FRCH provides information on how to contact each credit reporting agency.
Q: How do I redeem or change the information on a savings bond?
A: The Federal Reserve System operates a Treasury Services function that serves as the U.S. Department of the Treasury’s fiscal agent for U.S. Savings Bonds and Treasury securities. Consumers calling FRCH with any questions related to federal savings bonds are directed to the Treasury Services savings bond department at 1-800-553-2663. Questions or problems regarding Treasury securities can be resolved by calling the Treasury Services securities area at 1-800-722-2678.
Q: I received an official-looking letter [or e-mail] that claims to be from a financial institution. Is it actually a scam? And what should I do if I am a victim of a scam?
A: When consumers contact FRCH to inquire about the integrity of a letter or e-mail, FRCH representatives confirm whether the communication is a known scam and advise callers to exercise caution, especially when handling a potentially malicious e-mail. Consumers who have already fallen victim to a scam by providing deposit account information or sending money electronically should notify their financial institutions immediately, file a police report, and contact the local FBI office. (FRCH maintains a contact list of local FBI offices.) If a consumer reports a scam that FRCH is unaware of—especially one that uses the Federal Reserve System name—FRCH representatives may request that the consumer provide them with a copy of the e-mail or correspondence so that the scam can be investigated further.
FRCH receives inquiries on scores of other topics related and unrelated to financial institutions. Some can be answered readily (e.g., What’s the correct form I need to fill out for my specific situation?) but others require some investigating (e.g., Can my bank offset my checking account to pay my loan, or What is the legal process for escheating a checking account to the state?). FRCH representatives won’t always know the answer, but they are committed to helping consumers track down the correct resource.
For questions about damaged currency, however, the answer is pretty straightforward. Says Lynch: “Consumers should contact the U.S. Bureau of Engraving and Printing, Mutilated Currency Division.” Its phone number is 1-866-575-2361 and its web site is www.moneyfactory.gov/damagedcurrencyclaim.html.
Federal Reserve Consumer Help’s mission
To promptly and courteously guide consumers with complaints about financial institutions to the appropriate agency for help. We also respond to consumer questions about federal consumer protection laws and regulations.