Credit Reporting Agencies to Pay $6 Million Settlement

 CreditReport

Written By ESR News Blog Editor Thomas Ahearn

Attorney Generals from 31 states have announced that the three main credit reporting agencies – Equifax, Experian, and TransUnion – agreed to pay a $6 million settlement to their states and change their business practices to benefit consumers, according to a news release from Ohio Attorney General Mike DeWine, who initiated a multi-state investigation in 2012 that resulted in the settlement.

“We are announcing a comprehensive multistate settlement that will help protect consumers from credit reports that are wrong, out of date, or even mixed up with someone else’s report, and it will reduce the chance that a consumer is wrongly denied a house loan, a car loan, or even a job, because of an inaccurate credit report,” Attorney General DeWine stated in the news release.

The investigation into these credit reporting agencies focused on consumer disputes about credit report errors, monitoring and disciplining data furnishers who provide the credit reporting information, accuracy in consumer credit reports, and the marketing of credit monitoring products to consumers who call the credit reporting agencies to dispute information on their credit report.

Under the settlement, the credit reporting agencies agreed to increase monitoring of data furnishers, require more information from furnishers, limit direct-to-consumer marketing, provide more protection for consumers disputing credit reports, limit data added to credit reports, provide more consumer education, and comply with state and federal laws including the Fair Credit Reporting Act (FCRA).

Key provisions of the settlement – an Assurance of Voluntary Compliance – include the following:

Higher standards for data furnishers:

  • The credit reporting agencies must maintain information about problem data furnishers and provide a list of those furnishers to the states upon request.
  • The credit reporting agencies and data furnishers must use a better, more detailed system to share data.

Limits to direct-to-consumer marketing:

  • The credit reporting agencies cannot market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.
  • The credit reporting agencies must tell consumers that purchasing a product is not a requirement for disputing information on their credits reports.

Added protections for consumers who dispute credit reporting information:

  • The credit reporting agencies must implement an escalated process for handling complicated disputes involving identity theft, fraud, or “mixed” files where one consumer’s information is mixed with information from another consumer.
  • Each credit reporting agency must notify the other agencies if it finds a mixed file.
  • The credit reporting agencies must send a consumer’s supporting documents to the data furnisher.
  • Consumers may obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute.

Limits to certain information that can be added to a consumer’s credit report:

  • The credit reporting agencies are generally prohibited from adding information about fines and tickets to credit reports.
  • The credit reporting agencies cannot place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency, which gives consumers time to work out issues with their insurance companies.
  • The credit reporting agencies must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.

Additional consumer education:

  • The credit reporting agencies must tell consumers how they can further dispute the outcome of an investigation into a dispute, such as by filing a complaint with other agencies.
  • Each credit reporting agency must provide a link to its online dispute website on the website annualcreditreport.com, and the credit reporting agency’s dispute website must be free of ads and any marketing offers.

Participating in the $6 million settlement are the Attorney Generals from the states of Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.

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