CFPB Releases Report Detailing Problems in Credit Reporting Industry

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Written By ESR News Blog Editor Thomas Ahearn

The Consumer Financial Protection Bureau (CFPB) has released a special report that details the problems in the credit reporting industry that the CFPB has uncovered and corrected through oversight work and outlines actions the CFPB has taken to address these problems such as fixing data accuracy at credit reporting companies, repairing the broken dispute process, and cleaning up information being reported.

“Since we began our oversight work, the CFPB has been uncovering and correcting problems in the consumer reporting industry,” CFPB Director Richard Cordray stated in a press release. “Because of our work, important improvements are being made. Much more work needs to be done but our corrective actions are leading to positive changes that are benefiting consumers all over the country.”

The CFPB report – ‘Supervisory Highlights Consumer Reporting Special Edition’ – focused on CFPB supervision of Consumer Reporting Companies (CRCs) that sell the information in consumer reports to creditors and other users and what significant advances CRCs have made to promote greater data accuracy, dispute handling and resolution, and oversight of data furnishers. The CFPB report found:

  • Data Accuracy: CFPB examiners found some consumer reporting companies lacked good quality control to check the accuracy of their consumer records and directed them to make necessary changes. The CFPB found that quality control programs have been instituted and these companies are also taking better corrective actions when mistakes are identified and making system improvements to prevent the same mistakes from happening again.
  • Dispute Handling and Resolution. CFPB examiners discovered that some consumer reporting companies were not following federal requirements that said they must send a notice with the results of disputes to consumers and failing to consider documentation provided by consumers on disputed items. The CFPB directed these companies to improve their dispute investigation systems these companies have improved processes for investigating disputes.
  • Oversight of Data Furnishers: CFPB examiners found widespread problems with data furnishers supplying incorrect information to consumer reporting companies and directed them to take steps to address these problems. Several furnishers dedicated more resources to ensuring the integrity of the information that include better investigations and handling of disputes, notifying consumers of results, and taking corrective action when inaccurate information is supplied.

According to the press release, consumer reporting companies are businesses that track information about a consumer, including credit history, deposit account history, and other consumer transactions. Reports sold by the three largest consumer reporting companies – Equifax, Experian, and TransUnion – are used in determining everything from consumer eligibility for credit to rates consumers pay for credit.

Since launching its supervision of the credit reporting market, the CFPB has identified significant issues with the quality of the credit information provided by furnishers and maintained by credit reporting companies. Consumers continue to complain about the credit reporting industry in high numbers. The CFPB has handled approximately 185,700 credit reporting complaints as of February 1, 2017.

More Information about the CFPB and Credit Reporting from ESR

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