Written By ESR News Blog Editor Thomas Ahearn
In November of 2021, the Consumer Financial Protection Bureau (CFPB) released a report about “Disputes on Consumer Credit Reports” that found consumers in majority Black and Hispanic neighborhoods, younger consumers, and those with low credit scores were far more likely to have disputes appear on their credit reports.
“Families living in majority Black and Hispanic neighborhoods are far more likely to have disputes of inaccurate information appear on their credit reports,” CFPB Director Rohit Chopra stated in a news release about the report. “Error-ridden credit reports are far too prevalent and may be undermining an equitable recovery.”
In nearly every credit category the report reviewed, consumers residing in majority Black areas were more than twice as likely to have disputes appear on their credit reports thai consumers residing in majority white areas. For auto loans, consumers in majority Black areas were more than three times as likely to have disputes.
Under the federal Fair Credit Reporting Act (FCRA), consumers have a right to file a dispute with consumer reporting agencies (CRAs) to correct inaccuracies on their reports. The FCRA requires CRAs to process and investigate the disputes in a timely manner and correct any inaccuracies uncovered by the investigation.
The CFPB is committed to further researching the causes of credit report disputes. In October of 2021, the CFPB – along with the Federal Trade Commission (FTC) and the North Carolina Department of Justice – filed an amicus brief in a case regarding a company seeking to gain immunity from inaccurate consumer reporting.
In November of 2021, seven U.S. Senators sent a letter urging the CFPB to reform the credit reporting industry by using the CFPB’s existing supervisory, rulemaking, and enforcement authority over the largest nationwide CRAs to improve the accuracy of credit reports, streamline the dispute process, and hold CRAs accountable for errors.
Consumer complaints received by the CFPB reflect significant concern about inaccuracies in consumer reports. In 2020 alone, companies provided responses to more than 191,000 such complaints, which represented approximately 68 percent of credit or consumer reporting complaints responded to by companies that year.
Enacted in 1970, the FCRA regulates consumer reporting. Because of the importance of accuracy of consumer reports to businesses and consumers, the FCRA requires CRAs to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”
Employment Screening Resources® (ESR) – a leading global background check provider that was named to the 2021 HRO Today’s Baker’s Dozen list of screening leaders – provides employers with employment purpose credit reports in compliance with federal, state, and local laws. To learn more about ESR, visit www.esrcheck.com.
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