C Citigroup Inc

By AnnaMaria Andriotis 

Teri Carter Beahm was out of work and nearly out of money when she called Citigroup Inc. on March 30, two days before a $64 credit-card payment was due.

The private-events bartender got nowhere with the bank's chat bot. She messaged the bank asking if a refund for an item she had returned could substitute for the payment. When she called, an automated message said to try again later.

"Is someone going to answer my question before tomorrow when my payment is due?" she wrote in a follow-up message. She didn't get an answer.

Millions of Americans have asked for a break on their debt payments to weather the coronavirus shutdown. Their lenders are having a hard time keeping up.

Borrowers seeking debt relief are encountering jammed phone lines, overflowing inboxes and stretched-thin customer-service departments. Multiple calls to the same lender can yield different answers on the relief programs borrowers qualify for. Sometimes it is taking lenders weeks to reflect the changes on borrowers' accounts.

And there is no set menu of relief options for many consumer debts; lenders vary widely in how much relief they are offering and for how long. Lenders are declining to defer payments for some borrowers who were behind on their payments before the coronavirus laid waste to the U.S. economy. Some who have been given deferments are getting alerts that their payments are past due anyway.

Lenders "are pretty overwhelmed by the amount of calls and questions they're getting," said Leslie Parrish, a senior analyst who covers consumer lending at Aite Group, a research and consulting firm.

These days, Ms. Beahm spends much of her time on the phone with creditors. She was able to keep up with her roughly $1,600 a month in minimum payments on 10 credit cards, a car lease and three personal loans until the pandemic put a stop to the weddings and private parties she worked.

Ms. Beahm sent Citigroup six messages between March 30 and April 9. A few days after she missed her credit-card payment, she was charged a $28 late fee and $42 in interest.

In mid-April, Citigroup sent Ms. Beahm a letter and a digital message saying that her late fee was waived and her payments would be put on hold. But about a week later, she got an email saying she was late. On May 1, she dipped into her small emergency fund to make the $64 payment after she called the bank and heard an automated message that confused her.

A spokeswoman said the bank waived Ms. Beahm's late fee for April and deferred her payments for May and June. "While Ms. Beahm's request was addressed last month, we sincerely regret the delay in handling it. It's not representative of the experience we strive to provide," she said.

The bank, she said, has seen a "significant response from customers who are experiencing financial hardship" and has helped more than 1.3 million individuals and small businesses by deferring payments and waiving fees "in a matter of weeks."

Americans were carrying record levels of debt before the pandemic hit, and a lack of access to relief options threatens to increase that burden. Late fees and interest payments could plunge struggling borrowers deeper into debt. Missed payments and rising balances could drag down credit scores, putting affordable credit out of reach when it is most needed.

Steven Sickinger dialed Discover Financial Services three times in recent weeks to ask for a break on his credit-card bill. He is earning a third of his pre-pandemic pay as a manager at an auto-repair shop in Tucson, Ariz., because of the decline in customers.

Mr. Sickinger said that a Discover customer-service representative told him he could defer payments on the card, which has a balance of about $2,000, but would have to make a lump-sum payment when he starts paying again.

"I said, 'How am I supposed to make a lump-sum payment when I can't afford the one that is due now?'" Mr. Sickinger said. He said his request to speak with a supervisor was turned down.

A Discover spokesman declined to comment on Mr. Sickinger's situation but said the company is offering deferments and other relief to customers in need. "We handle every case on an individual basis," he said.

In some cases, customer-service agents inundated with calls and unfamiliar with their banks' relief programs have given borrowers inaccurate information.

Ron Harris called U.S. Bancorp in March to ask about delaying his credit-card payment after the coronavirus shutdown put his two sons, who live with him, out of work.

The 51-year-old teaching assistant said a customer-service representative told him his $400 payment would be put on hold for April.

When he later called to inquire about a missed-payment notice, he was told he was ineligible for a deferral. The representative encouraged him to make a payment and said the bank would try to waive some interest charges in exchange.

"If I could make a payment, I wouldn't be asking for a deferral," Mr. Harris said. He borrowed money from extended family members to cover the bill.

U.S. Bank said that the employee who said Mr. Harris could skip the April payment made a mistake and that the bank has since deferred his payments for May and June and refunded him a late fee and interest charges.

"We have coached that agent and are reviewing additional call recordings during that time to ensure there are no other such errors," she said.

Technical glitches have also caused problems.

Diana Rodriguez spent much of March sick with Covid-19, the illness caused by the coronavirus, and worried it would put her out of work. She also spent hours on the phone trying to get through to her creditors.

The software engineer called Santander Consumer USA Holdings Inc., seeking a break on a loan for a new Toyota RAV4 she bought last summer. A representative said the lender would email her the necessary paperwork to put her $736 monthly payment on hold.

Ms. Rodriguez never got the email, but she did receive a late-payment notice. When she called back, she waited on hold for 2 1/2 hours before reaching a supervisor, who said Santander was having technical difficulties with the deferment forms.

Santander received more than a million calls in March from customers requesting help and has given more than 350,000 customers extensions, hardship modifications or fee waivers, a spokeswoman said.

"We are proud of the work we have done to help customers stay in their vehicles and manage their payments," she said.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com

(END) Dow Jones Newswires

May 13, 2020 05:44 ET (09:44 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.