June 20, 2023

CFPB: New Report Identifies Issues with Increased Servicemember Use of Digital Payment Apps

Annual report also highlights other financial challenges facing the military community

Today, the Consumer Financial Protection Bureau (CFPB) released its annual report on the top financial concerns facing military families. The report highlights the growth of digital payment app usage in the servicemember community, the unique risks to servicemembers from these services, and the potential abuse from bad actors. Some servicemembers have also indicated in their complaints about incurring serious financial harm from scams and fraud when using these services, and their complaints suggest digital payment app providers often fail to provide timely and substantive resolutions.

Servicemembers, veterans, and their families have submitted more than 323,000 consumer complaints since the CFPB opened its doors in 2011. In 2022, they submitted nearly 66,400 complaints to the CFPB, a 55% increase from 2021. In 2022, they submitted more than 1,100 complaints on digital payment apps, one of the fastest-growing complaint types submitted to the CFPB. Many of the reported issues and complaints about digital payment apps relate to frauds and scams, suggesting it is a rapidly growing financial threat to military families.

In building on that earlier research, today’s report summarizes in-depth complaint data analysis from active duty servicemembers, veterans, and their families. Today’s report focuses on the growth of digital payment apps in the servicemember community, and identified several risks to military families, including:

To address these emerging risks, the report recommends digital payment app providers:

The CFPB’s earlier research highlighted the risks to consumers using digital payment apps. Funds sitting in these accounts often lack deposit insurance protection. Digital payment apps are also primarily regulated by state laws and generally do not require that customer funds be stored in or automatically swept into insured accounts.

Read today’s report, Office of Servicemember Affairs Annual Report, January – December 2022 .

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

This post was originally published here.