While certainly no surprise to attorneys like us who deal with these agencies all the time, it's nice to see the government start to take notice.
Instead of rising to meet the increased demand, the big three credit reporting agencies (Equifax, TransUnion, and Experian) have been doing little to respond to and resolve these disputes.
Government Investigation Finds Equifax, TransUnion, and Experian Failed to Address Errors in Consumer Credit Reports
A House of Representatives subcommittee investigation has shown that there has been an increase in credit report disputes and a significant decrease in action taken to resolve those disputes on the part of the big three credit reporting agencies. The subcommittee has called for the Consumer Financial Protection Bureau to investigate this conduct as a potential violation of the Fair Credit Reporting Act.
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What Is a Credit Reporting Agency?
Nationwide credit reporting agencies (NCRAs), also known as credit bureaus, credit reporting agencies, or credit reporting companies, compile consumer data into credit reports and then sell those reports to third parties. These credit reports contain information pertaining to credit cards (limits, balances, and payment history), loans (history, balances, and repayment history), credit inquiry history, bankruptcies, unpaid alimony and child support, and any accounts that may be in collection.
The Big 3 Credit Reporting Agencies
Currently, there are three main nationwide consumer reporting agencies (NCRAs), also known as credit reporting agencies, dominating the market. They are the subject of this investigation: Equifax, Transunion, and Experian.
The House of Representatives Subcommittee Requested a Broader Government Agency Investigation into the Big 3 Credit Reporting Agencies
After conducting their own investigation, the Chairman of the House of Representatives' Select Subcommittee on the Coronavirus Crisis has sent a letter to the director of the Consumer Financial Protection Bureau (CFPB) calling for the government agency to investigate the big three credit reporting agencies: Equifax, TransUnion, and Experian. The subcommittee’s findings indicate possible violations of the Fair Credit Reporting Act (FCRA) by the agencies in failing to respond to and resolve consumers’ credit report disputes during the pandemic.
What Is the Purpose of the Fair Credit Reporting Act? How Does the Fair Credit Reporting Act Protect Consumer Rights?
You have the right to accurate information on your credit report. The Fair Credit Reporting Act (FCRA) is a federal law that ensures that all consumer credit information is fair and accurate. The FRCA is enforced and violations of the Fair Credit Reporting Act are investigated by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). The FCRA also protects the information collected by credit reporting agencies and limits the purposes for which these reports can be requested. The act specifically states that credit reporting agencies have a duty to investigate any disputed information. The Fair Credit Reporting Act protects consumer rights by ensuring accuracy and protecting your private information from being accessed unless there’s a specific purpose.
Investigation Shows Longstanding Problems with the Credit Reporting Agencies’ Conduct
In May of 2022 as part of the investigation, the subcommittee requested information from Equifax, TransUnion, and Experian regarding their failures to respond to and resolve consumers’ credit report disputes during the pandemic. Their investigation found that there were longstanding problems with regard to investigating and correcting disputed information. This called into question whether the NCRAs are fulfilling their legal duty to consumers and the CFPB under the Fair Credit Reporting Act.
This investigation began when the CFPB found that the rate at which the big three credit reporting agencies were correcting errors in credit reports had dropped drastically. In 2019, a quarter of the credit report disputes filed were corrected or otherwise resolved. In 2021, that rate dropped to 4.1%. Their actions, or, more accurately, lack of action has caused many Americans’ credit scores to drop, affecting their access to credit cards, loans, housing, and employment.
A Steep Increase in Credit Report Disputes
The investigation found that, in recent years, consumers have been disputing their credit reports more frequently than ever before. Fourteen million disputes were filed with Equifax alone in 2021, compared to the estimated eight million disputes filed across all of the big three credit reporting agencies in the years prior. Instead of rising to meet the increased demand, the big three credit reporting agencies (Equifax, TransUnion, and Experian) have been doing little to respond to and resolve these disputes.
Credit Reporting Agencies Have Ignored Millions of Disputes
The investigation found that, between 2019 and 2021, at least 13.8 million disputes were discarded and not investigated by Equifax, TransUnion, and Experian. The credit reporting agencies have their reasons for why this happened, claiming they were illegitimate for one reason or another. Under the FCRA, credit reporting agencies must investigate all disputes submitted directly by consumers or their authorized representatives. The subcommittee investigation indicated that credit reporting agencies could be discarding millions of legitimate disputes each year, which is specifically detrimental to consumers who receive support services due to their financial struggles.
The investigation also showed that the big three credit reporting agencies have been leaving the burden of investigating these credit report disputes to data furnishers. Data furnishers are the organizations that provide the data that credit reporting agencies use to create credit reports. According to the investigation, the big three credit reporting agencies have been leaving more than half of their disputes for data furnishers to investigate.
The Great Majority of Credit Report Disputes Remain Unresolved for Consumers
The investigation resulted in a concerning conclusion: consumers are not seeing relief after filing their credit report disputes. Relief, in this case, means removing and correcting errors on their credit reports. Between 2019 and 2021, anywhere between 47% and 57% of these disputes saw no changes made by Equifax, TransUnion, and Experian. While some of the disputes may genuinely be illegitimate, many reflect true errors in consumers’ credit reports which can impact many vital areas of their lives and limit their opportunities.
Credit Report Error? Need to Dispute a Credit Report?
Credit report disputes may be filed with the Consumer Financial Protection Bureau, the credit reporting agency (Equifax, TransUnion, or Experian), or the data furnishers, meaning the source from which the credit reporting agencies get their information.
Let Consumer Attorneys show you how to dispute a credit report and win. As a firm dedicated to protecting the rights of consumers against credit reporting agencies, we are experts in credit report disputes. Our team knows how to dispute Equifax, TransUnion, and Experian with a proven track record. Contact us today for a free case review.
Has Equifax, TransUnion, or Experian Failed to Correct Errors in Your Credit Report? Contact Consumer Attorneys Today
If you have disputed an Equifax credit report, TransUnion credit report, and/or an Experian credit report and have not had a response or resolution, contact Consumer Attorneys. Our team is well prepared to help you with your Equifax dispute, TransUnion dispute, and Experian dispute and to ensure you see results. Click or call today to discuss your individual case and your needs.