Content analysis of American consumers’ credit card fraud complaints filed with the Consumer Financial Protection Bureau
| Date | 30 May 2023 |
| Pages | 618-628 |
| DOI | https://doi.org/10.1108/JFC-03-2023-0070 |
| Published date | 30 May 2023 |
| Author | Hooman Estelami,Kevin Liu |
Content analysis of American
consumers’credit card fraud
complaints filed with the Consumer
Financial Protection Bureau
Hooman Estelami and Kevin Liu
Gabelli School of Business, Fordham University, New York, New York, USA
Abstract
Purpose –Every year, millions of consumersaround the world become victims of credit card fraud. These
individuals haveto appeal to their credit card companies to reverse unauthorized charges.This study aims to
profile the American consumers’experience when complaints to their credit card companies about
unauthorized chargesfail to produce a resolution. Using a large database of consumercomplaint filings with
the Consumer Financial Protection Bureau (CFPB), the characteristics of these consumer complaints are
identified,and the drivers of consumer financial hardship resultingfrom credit card fraud are determined.
Design/methodology/approach –A random sample of consumer complaints about their credit card
companies’perceived mishandling of cases, filed with the CFPB, is used to conduct content analysis. The resulting
content analysis categories are used in a predictive model to determine the drivers of consumer hardship.
Findings –In nearly one-quarter of all complaint filings, the credit card company had blamed the
complainant as the party responsible for the fraudulent charges or refused to open a fraud investigation
altogether. Nearly 60% of complaint reports contain expressions of emotional distress and many mention
financial hardship. Nearly half of all complainants consider the fraud department operations of their credit
card company as lacking in servicequality, many reporting inability to reach the department or to receive a
returned call.Even after CFPB intermediation, only 15% of complainantsreceive some form of financial relief
from their credit card company. The majority of the complainantsreport a lack of willingness by the credit
card companyto reverse unauathorizedcharges, leaving the complainant financiallyresponsible for them.
Research limitations/implications –This study focused on data collected from consumers. Future
research can expand the scope of inquiry by surveying the staff and executives in the fraud investigation
departmentsof credit card companies to determine the norms of fraudinvestigation used within the industry.
Social implications –This study sheds light on the financial hardship and emotional pains that
consumersvictimized by credit card fraud experience in dealingwith their credit card companies.
Originality/value –To the best of the authors’knowledge, this is the first studyto empirically examine
American consumers’complaints about the fraud investigation operations of their credit card companies.
Using data captured through the complaint filing system of a federal bureau (CFPB), the findings have
implicationsfor policymakers, regulators and creditcard companies.
Keywords Credit card, Fraud, Consumer protection
Paper type Research paper
Introduction
Over the past few years, creditcards have increasingly become a payment method of choice
for many American consumers (Yokum and Kalaiselvam, 2023). The growing use of credit
cards has also fueled growth in credit card fraud and the associated financial losses. The
increase in losses attributed to credit card fraud is due to a range of factors, including the
growing reliance of consumers on credit cards, security breaches of the information
infrastructures of merchants and increased technical and organizational capabilities of
JFC
31,3
618
Journalof Financial Crime
Vol.31 No. 3, 2024
pp. 618-628
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-03-2023-0070
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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