Introduction

The Consumer Financial Protection Bureau (CFPB) is a government agency responsible for safeguarding consumers in the financial sector. The CFPB keeps tabs on various lenders, banks, credit unions, or any financial company in the U.S. and ensures fair and legal practices between these entities and consumers as a whole. Think of the CFPB as the financial lifeguard for consumers.

The CFPB conducts extensive research and data collection on a daily basis. Much of the data is made available on the CFPB website for public use. One of the most intriguing data sets is the Consumer Complaint Database.

The CFPB collects hundreds of thousands of complaints from consumers each year. There is an enormous amount of information flowing into the consumer complaint database. Consumers can segment the data into different categories:

  • Bank account/service
  • Credit card
  • Credit reporting
  • Debt collection
  • Money transfer and virtual currencies
  • Mortgage, payday loan, student loan
  • and Other financial service.

Last month, LendEDU analyzed the bank account data and the results were quite interesting. So over the weekend, I thought it would be interesting to study the money transfer segment of the database.

Money transfers are a simple but important financial tool for the average consumer. Money transfer services make sending money across the world safe and secure. Today, the majority of money transfers happen electronically. If you’ve ever used TransferWise, MoneyGram, or Western Union, you’ve used a money transfer service.

The majority of money transfer transactions happen without a hitch. But occasionally, issues do arise and if needed the CFPB is there to hear your complaint. In my analysis of the database, I noticed that certain regions of the United States had a high number of complaints. So I thought it would be interesting to look at 2016 data on a state-by-state basis. The results are interesting!

States With The Most Money Transfer Complaints in 2016

  • California (209 complaints)
  • New York (115 Complaints)
  • Florida (113 complaints)
  • Texas (106 complaints)
  • Pennsylvania (56 complaints)

On the other end of the spectrum, there are the states with very few money transfer complaints.

States With The Least Money Transfer Complaints in 2016

  • Vermont (1 complaint)
  • Delaware (1 complaint)
  • Alaska (2 complaints)
  • Rhode Island (3 complaints)
  • North Dakota (3 complaints)

The next step is to figure out why these states have either the most or least complaints. At a glance, one big, potential influence jumps out: population. According to the U.S. Census Bureau data, the states with the most money transfer complaints are part of the top ten most populous states. Moreover, the states with the lowest number of complaints are within the top ten least populous states.

Taking this into account, a reasonable conclusion can be drawn that population has a direct impact on the number of money transfer complaints in a certain region. The logic is fairly simple: With increasing population, money transfer transactions increase. In other words, higher populations equal a higher number of money transfer complaints.

This, of course, is just the first observation of potentially many. What do you think would be a more likely cause of money transfer complaints by states? If you don’t agree with population, then let us know!

At any rate, 209 complaints out of nearly 40 million Californians amounts to only 0.00005 complaints per person. Whereas Vermont boasts 0.000001 money transfer complaints per person. The results of this study show safe the money transfers industry has become.


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