CFPB Calls Out Credit Bureaus in Report Diving into Consumer Complaints

The three major credit reporting agencies — Equifax, Experian, and TransUnion — are not treating consumers fairly, which is resulting in consumers suffering “serious harms,” according to a report issued yesterday by the Consumer Financial Protection Bureau. The report, along with pointing out how the three major bureaus are failing to meet their statutory obligations under the Fair Credit Reporting Act, also cited the “unnavigable quagmire” of medical debt as a problem that needs to be addressed.

A copy of the full report can be accessed by clicking here.

“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” said CFPB Director Rohit Chopra, in a statement. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

In response, the Consumer Data Industry Association, a trade group representing the credit reporting industry, pointed out that the report highlighted how credit repair companies can inflate the number of complaints and “undermine the process of addressing legitimate requests.”

The report reveals that complaints against the three credit bureaus accounts for more than half of all complaints filed by consumers with the CFPB. With respect to investigating complaints forwarded to them by the CFPB to determine whether all of their legal obligations have been met — a requirement under federal law — the three bureaus failed to conduct the review more than 50% of the time, according to the CFPB.

The report also accused the bureaus of relying “heavily” on using template responses to complaints, even though they have 60 days to respond, and accused Experian and TransUnion of not providing “substantive” responses if a third-party was suspected to have submitted the complaint, and accused Equifax and TransUnion of promising to investigate complaints by failing to provide the outcome of those investigations to the CFPB.

How the credit bureaus are responding to consumer complaints raises “serious questions about whether they are unable — or unwilling — to comply with the law,” according to the report.

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