Update: This article has been updated to include feedback received from Experian after it was originally published.
Experian regularly provides inaccurate information on their credit reports. To help determine if a consumer is approved for a loan, job or housing. and failing to properly investigate or correct errors when consumers dispute those errors. Lawsuit Filed Tuesday by the Consumer Financial Protection Bureau.
CFPB information It shows that last year the agency received 352,760 complaints from consumers about inaccurate information appearing on Experian credit reports, slightly fewer than the other two major credit bureaus. Consumers submitted 361,534 complaints to the agency about errors in Equifax reports and 378,538 complaints about errors in TransUnion reports.
“When consumers dispute errors on their credit reports, Experian conducts fraudulent investigations. rather than properly investigating disputes as required by federal law,” CFPB Director Rohit Chopra said in a statement. “Credit reporting errors can have serious consequences for a family's finances. And it is vital that the credit reporting giants abide by the law.”
Experian spokesman Jordan Takeyama said the company has been in contact with the CFPB about how the credit reporting industry handles information that may be inaccurate.
“This case has no basis at all. It goes against long-standing regulatory and judicial precedent. and is another example of the CFPB being irresponsible,” he wrote in an email, adding, “We are committed to meeting consumer needs. and take all of our regulatory obligations seriously. We take great steps to ensure that we investigate every consumer dispute thoroughly and above and beyond the requirements of the law. We took strong exception to the content and tone of the CFPB's allegations.
When a consumer reports an error in an Experian report, the company sends an automated credit dispute verification (ACDV) form to the supplier of the disputed information, such as a bank, credit card company. or debt collector The form contains a code that should indicate the reason the consumer disputes the information. To enable data suppliers to investigate and respond, however, according to the CFPB's lawsuit, Experian sends codes that “mischaracterize or fail to convey highly relevant information about Consumer disputes
In some cases, the CFPB alleges that Experian knowingly used codes for general categories. “It is claimed that the information is incorrect. Specific arguments were not given,” although the consumer provided detailed information about the error.
Compounding those issues, Experian was accused of giving too much weight to the answers it received from data suppliers in response to those ACDV forms. The CFPB said consumers often provide evidence to support disputes. own Such as the date and number of the bankruptcy case or documents showing that the information provider has previously agreed to delete or correct incorrect information.
“But Experian often does not prioritize documentation in resolving disputes. and often do not conduct re-investigation of disputes in addition to the supplier's ACDV response,” according to the lawsuit.
In other cases, the CFPB claims that Experian has documents that prove consumers already have rights to their files. But the company still failed to investigate issues beyond sending and receiving ACDV.
After Experian investigates The company sends letters to consumers explaining the results and what, if any, information has changed. Those letters are often “confusing, ambiguous, inaccurate, and internally inconsistent,” according to the lawsuit.
The CFPB said Experian's practices violated the Fair Credit Reporting Act and has asked the federal court to bar the company from future violations and order Experian to pay compensation to consumers harmed by its actions.