When it comes to picking between a multi-billion-dollar company and the customers whose credit scores its wrongly ravaged, President Donald Trump appears to be choosing the company.
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Russell Vought, Trump’s head of the Consumer Financial Protection Bureau, spent his first 18 months “trying to dismantle the bureau,” reports Fulcrum writer Andy Kroll, pointing out that Vought “ordered mass layoffs, tried to choke off the bureau’s funding and ended the lease on its headquarters, attempting to make good on his vow to put civil servants “in trauma.”
Federal courts blocked Vought’s efforts to close the CFPB outright, so Vought decided he would turn the corporate watchdog — created to monitor companies after their financial abuse led to the 2008 Recession — into a friendly “golden retriever.”
“Vought had accused the bureau of ‘thuggery’ in the past, and said the new CFPB would focus on deregulation, embrace ‘humility’ and adopt a ‘collaborative approach’ to its dealings with companies that harm consumers.
But now the harm keeps coming, according to Kroll.
Customer Jordan Carey received an alert from Credit Karma this year, informing him that his credit score had dropped 50 points in a single day, ultimately because of mistakes of credit card company Bilt. The company fumbled a critical transition for customers, due to no fault of the customers.
“[The news] sent me into a panic. I was thinking there is no way this is real,” said Carey, who had “stellar credit” and tended to pay off his Bilt credit card the day charges were posted.
Carey eventually discovered that his score hit had happened after a debt collector reported a supposed long-overdue payment. When he looked at the collections notice, he saw it listed Bilt as the cause of the error. But Bilt claimed ignorance, at first, blaming other credit companies for this and other mistakes and crashing customer credit scores.
Nearly 1,900 of Bilt’s customers received mistaken notices from a debt collector that said they owed hundreds or even thousands of dollars in unpaid credit card balances. The Fulcrum reports people wrote about receiving multiple false collections notices.
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But the Trump-era CFPB took a honey tack, reports Fulcrum.
“We reached out to the company,” Vought told Congress, “and before it got to the adversarial part of the process, they were able to fix their issues.” Fulcrum reports the CFPB even posted “a feel-good statement on its website,” touting its new approach and telling consumers that information provided by Bilt “appears to show” the firm was “back on track.”
“Yet two weeks after Vought’s testimony, Bilt failed customers again. This time, Bilt cardholders received mistaken debt collection notices and saw their credit scores go down as a result, sparking more embarrassing news stories and angry complaints,” reports Fulcrum. “It was Bilt’s second fiasco in six months, and as its customers scrambled to understand what had gone wrong, the CFPB was nowhere to be found.”
In February, Bilt relaunched its credit cards, but the rollout of “Bilt 2.0” was also a debacle, with Fulcrum reporting “Customers said their rent payments were paid late, double-charged or not paid at all. Credit limits had been lowered from one card to the next. Their cards were inexplicably frozen.”
“This unexpected double charge has caused significant inconvenience and financial distress,” one Bilt customer wrote to the CFPB in February after Bilt paid her rent twice in the same month. Bilt’s customer support department faltered as tens of thousands of messages poured in.
“Customers also raged that they were “unable to bypass chatbots and reach a human being for help,” reports Fulcrum and they complained that the company’s AI gave “completely wrong” and “demonstrably false” information.”
But Vought’s CFPB’s did not open an investigation. Nor did it craft a consent decree or enforceable pledge to ensure compliance. Documentation provided by Bilt, the bureau said, “appears to show” that the company had fixed its problems and that its systems were “back on track.”
“The press release just looks like they’re providing air cover for the company without directing real fixes or systematic changes,” said Austin Hinkle, a former supervision lawyer and section chief at the CFPB.
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The CFPB has not made a public statement since Bilt’s second breakdown.
