Consumer complaints about credit reporting agencies highlighted in CFPB report

Consumer complaints about credit reporting agencies highlighted in CFPB report

The Consumer Financial Protection Bureau (CFPB) released a report Tuesday that details complaints about consumer credit reporting agencies and their efforts to address those concerns.

The CFPB is required by the Fair Credit Reporting Act to produce an annual report about complaints submitted by consumers about the nationwide consumer reporting agencies (NCRAs) – Equifax, Experian and TransUnion. The latest edition of the report was based on the 488,000 consumer complaints the CFPB sent to the NCRAs between October 2021 and September 2022.

“TransUnion, Equifax and Experian routinely top the list of complaints submitted by consumers,” said CFPB Director Rohit Chopra. “We will be exploring new rules to ensure that they are following the law rather than cutting corners to fuel their profit model.”

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CFPB found that following changes made by the NCRAs in response to last year’s report, the companies have provided consumers with more substantive responses that are tailored to complaints and include explanations. Equifax, Experian and TransUnion are also reporting the closure of more complaints by providing relief to consumers in the form of an updated credit report.

The most common complaint sent to NCRAs concerned incorrect information on a consumer’s credit report. Inaccurate reports that hurt a consumer’s credit score can raise their borrowing costs and make it harder to buy a home, start a business or work at certain jobs that require a credit check.

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The second most common issue referred by the CFPB to the NCRAs involved problems with an investigation conducted by a reporting company. According to the CFPB’s report, 93% of consumers reported having previously attempted to fix the problem with their credit report by contacting an NCRA.

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The third most common complaint sent to NCRAs involved the improper use of a consumer’s credit report – although that was a more significant issue for the other smaller credit reporting agencies (CRAs) that are also included in the CFPB’s report.

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The Consumer Data Industry Association provided the following statement regarding the CFPB report to Fox Business on behalf of the national credit bureaus: “The Consumer Data Industry Association (CDIA) is reviewing the CFPB report in detail. Consumers, credit reporting agencies, banks and regulators continue to share a common goal when it comes to credit reports: they should be as accurate and reliable as possible. The nationwide credit reporting agencies (NCRAs) play an important role in the financial lives of consumers and we take that responsibility seriously.”

It’s unclear whether the CFPB will put forward new regulations that apply to NCRAs or overhaul the credit reporting system more broadly. The agency declined to offer an additional comment beyond Chopra’s statement in the press release accompanying the report.

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However, the CFPB did say that the agency “expects the three nationwide consumer reporting companies to continue improving how they service consumers.” It recommended that Equifax, Experian and TransUnion take the following steps:

  • Consider whether implementing automated processes will require consumers to do more work to exercise their legal rights.
  • Recognize that consumers may begin to rely more on communications technologies to draft complaints that ease their writing burden but could result in unique complaints being improperly grouped with similar-sounding complaints.
  • Enable increased consumer participation on the data side of consumer reporting to potentially reduce inaccuracies that stem from poor visibility for consumers into their own data.
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