Citing statistics and findings from a new FTC study of credit reports, 60 Minutes reported that Credit report mistakes are common, may lower consumer credit scores and are exceedingly difficult to correct. The credit reporting industry is dominated by three agencies: Equifax, Experian and Transunion. The Big Three credit reporting agencies lead a $4 billion a year industry.
The FTC study, cited by 60 Minutes, found that consumer credit report mistakes are common and that the dispute process created by federal law often fails to correct credit report mistakes. The FTC Credit Report Study, followed 1,001 consumers who reviewed more than 2,900 credit reports. The study, in which consumers used the Fair Credit Reporting Act (FCRA) dispute and reinsvestigation process to resolve credit report mistakes, also found that:
Credit Reporting Agencies Fail to Peform Investigation of Consumer Disputes Required by Federal Law
The FCRA requires that credit reporting agencies conduct a reasonable investigation following a consumer’s dispute of a credit report error. Americans dispute 8 million credit report mistakes a year. Many of these disputes are made through websites maintained by Equifax, Experian and Transunion. Mike DeWine, Ohio’s Attorney General, stated on 60 Minutes that credit reporting agencies don’t do any investigation let alone a reasonable investigation as required by federal law. 60 Minutes highlighted how the investigation process conducted by credit reporting agencies is not actually an investigation. 60 Minutes explained the credit reporting industry’s dispute process, highlighting its gross inadequacy. According to 60 Minutes, the Big Three convert a consumer dispute into a two digit industry code which they transmit to the reporting creditor. Typically the creditor (or “furnisher” as the creditor supplying credit information is referred to) replies that they have confirmed the accuracy of the information disputed by the consumer. The credit reporting agency then reports to the consumer that they have completed their investigation and have confirmed the accuracy of the disputed information.
Disputing Credit Report Mistakes Frequently Fails to Fix
60 Minutes profiled several consumers who were unable to have credit report mistakes corrected through the FCRA’s reinvestigation process. One consumer was unable to even find the inaccurate derogatory credit information that was being reported about her until she found a credit report that had been provided to a lender. Many consumers are unaware that the credit report or “File Disclosure” that they receive is different than the “Consumer Report” that credit reporting agencies send to lenders. It turned out that credit reporting agencies were reporting false information about this consumer to lenders but that this false information was not contained in the File Disclosure provided to the consumer.
Consumer FCRA Lawsuits May Provide Fix
Several consumers and consumer justice attorneys appearing in the 60 Minutes segment discussed how their pursuit of FCRA claims in a federal lawsuit was the only thing that ultimately led to their credit report mistakes being corrected and their recovering reasonable damages.
Contact our experienced FCRA attorneys for information on how you may dispute credit report mistakes and pursue appropriate FCRA claims.