The Consumer Financial Protection Bureau (CFPB) released a report Tuesday outlining complaints about consumer credit reporting agencies and their efforts to address those concerns.
The CFPB is required by the Fair Credit Reporting Act to prepare an annual report on complaints filed by consumers about the nationwide consumer reporting agencies (NCRAs)—Equifax, Experian, and TransUnion. The latest edition of the report is based on 488,000 consumer complaints the CFPB sent to NCRAs between October 2021 and September 2022.
“TransUnion, Equifax and Experian regularly top the list of complaints filed by consumers,” said CFPB Director Rohit Chopra. “We will explore new rules to ensure they comply with the law rather than cut corners to bolster their profit models.”
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The CFPB found that following changes made by the NCRAs in response to last year’s report, companies provided more robust responses to consumer complaints that were tailored and included explanations. Equifax, Experian and TransUnion also report that more complaints are closed by providing assistance to consumers in the form of an updated credit report.
The most common complaint sent to the NCRAs involved inaccurate information on a consumer’s credit report. Inaccurate reports that damage a consumer’s credit score can increase their borrowing costs and make it harder to buy a home, start a business, or work in certain jobs that require a credit check.
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The second most common issue cited by the CFPB to NCRAs is problems with the reporting company’s investigation. According to the CFPB’s report, 93% of consumers reported that they had previously tried to resolve a problem on their credit report by contacting the NCRA.
The third most common complaint sent to NCRAs involved improper use of a consumer’s credit report — although this was a more significant problem for the other smaller credit reporting agencies (CRAs) included in the CFPB’s report.
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The Consumer Information Industry Association, on behalf of the national credit bureaus, provided Fox Business with the following statement regarding the CFPB report: “The Consumer Information Industry Association (CDIA) is reviewing the CFPB report in detail. Consumers, credit reporting agencies, banks and regulators share a common goal when it comes to credit reports. we continue: they must be as accurate and reliable as possible. The National Credit Reporting Agencies (NCRAs) play an important role in consumers’ financial lives, and we take that responsibility seriously.”
It is unclear whether the CFPB will issue new rules applicable to NCRAs or overhaul the credit reporting system more broadly. The agency declined to comment further beyond Chopra’s statement in a press release accompanying the report.
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However, the CFPB said the agency “expects that the three nationwide consumer reporting companies will continue to improve the way they serve consumers.” Equifax advised Experian and TransUnion to take the following steps:
- Consider whether implementing automated processes will require consumers to do more to exercise their legal rights.
- Note that consumers may begin to rely more on communication technologies to prepare complaints, which eases their writing burden, but may result in unique complaints not being properly grouped with similar-sounding complaints.
- Encourage increased consumer participation on the data side of consumer reporting to potentially reduce inaccuracies caused by consumers’ poor visibility into their own data.