Continuing its scrutiny of the credit reporting industry, the Consumer Financial Protection Bureau reported on December 13 that customers of the “big three” credit-reporting bureaus disputed more than 32 million items in their credit files, with reports of debts under collection triggering the lion’s share of the protests.
Equifax Information Services LLC; Experian Information Solutions Inc.; and TransUnion LLC resolved an average of 15 percent of consumer disputes internally. The rest were referred back to the data furnisher — the bank or credit card company or other entity that provided the disputed information, the CFPB said.
However, the agency found that “documentation consumers mailed in to support their cases may not be getting passed on to the data furnishers for them to properly investigate and report back to the credit reporting company.”
No enforcement actions were announced, but CFPB director Richard Cordray said during a conference call with reporters that the report “establishes a baseline knowledge about the industry as we embark on our regulatory and supervisory mission.”
He continued: “Given our supervisory role over many of the providers and distributors of credit report information, we can play a positive role in resolving accuracy issues and other risks to consumers within the system. And given our enforcement authorities, we can make sure that consumer financial laws are being followed.”
The three credit bureaus each have more than 200 million files on consumers, generating credit reports — and three-digit scores — that businesses use to grant credit and set interest rates for loans.
The CFPB found that more than half of the account information for consumers comes from credit card companies. More than 40 percent of the disputes relate to debt in collections, and such debt is five times more likely to be disputed than mortgage information. Although consumers are entitled to a free annual copy of their credit reports, the CFPB found that fewer than one in five people take advantage of this right.
Before the creation of the CFPB by the Dodd-Frank Act, consumer credit reporting companies were not supervised at the federal level. In July, the CFPB issued a final rule outlining its authority to supervise the companies. In September, it detailed the procedures it will use to examine them.
Also in September, the CFPB released a study that compared credit scores sold to creditors and those sold to consumers, and found the scores differed significantly about 20 percent of the time.
In late November, the CFPB took aim at smaller credit reporting agencies that specialize in information related to consumers’ check-writing, medical payments, tenancy, employment or insurance claims. The agency sent warning letters to six companies for failing to ensure that consumers have easy access to their credit reports.
Contact Jenna Greene at firstname.lastname@example.org.