The Consumer Financial Protection Bureau (CFPB) today sued Experian, the national consumer credit reporting agency, for threatening consumers’ access to credit, employment, and housing by failing to properly investigate consumer disputes.
“Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law,” CFPB Director Rohit Chopra said in a press release.
Based in Costa Mesa, California, Experian is one of the nation’s three largest credit reporting conglomerates along with Equifax and TransUnion. Experian is a subsidiary of Experian plc (LSE:EXPN), a global data broker and analytics company headquartered in Ireland.
Specifically, the consumer watchdog alleges that Experian conducts “sham investigations” that does not take “sufficient steps to intake, process, investigate, and notify consumers about consumer disputes, resulting in the inclusion of incorrect information on credit reports.”
The Fair Credit Reporting Act (FCRA) requires that consumer reporting agencies take steps to ensure consumer reports are accurate, as well as conduct investigations of information disputed by consumers. The CFPB claims Experian has violated the FCRA and harmed consumers by:
- Conducting sham investigations that fail to properly address consumer disputes, to include: using faulty intake procedures that do not accurately convey all relevant information about disputes to the original furnisher; “routinely and uncritically” accepting the original furnisher’s response to the disputed information, “even when that response was improbable or illogical on its face, or when Experian has other information available that suggests the furnisher is unreliable;” and, at the conclusion of investigations, sending consumers notices that “fail to inform them of the investigation results,” instead providing information “that is confusing, ambiguous, incorrect, or internally inconsistent.”
- Improperly reinserting inaccurate information on consumer reports, such as by failing to implement “basic matching tools that prevent or greatly reduce the likelihood of reinsertion by a new furnisher of a previously deleted tradeline,” and instead improperly reinserting “inaccurate information into consumer reports because it fails to match newly reported information with records of previously deleted information.”
The CFPB also alleges that Experian’s faulty dispute intake procedures and failure to provide furnishers with consumer-submitted documentation, uncritical deference to furnishers’ responses to disputed information, and failure to prevent improper tradeline reinsertions also violate the Consumer Financial Protection Act (CFPA)’s prohibition on unfair acts or practices.
