2022Credit Reports

Written By ESR News Blog Editor Thomas Ahearn

On January 5, 2022, the Consumer Financial Protection Bureau (CFPB) released its annual report of consumer and credit reporting complaints that revealed how changes in complaint responses from three nationwide consumer reporting agencies (NCRAs) – Equifax, Experian, and TransUnion – resulted in less consumer relief.

The report from the CFPB – a government agency that enforces the federal Fair Credit Reporting Act (FCRA) that regulates the NCRAs – found that Equifax, Experian, and TransUnion together reported relief in response to less than 2 percent of covered complaints in 2021, down from nearly 25 percent of covered complaints in 2019.

Consumers submitted more than 700,000 complaints to the CFPB regarding Equifax, Experian, and TransUnion from January 2020 to September 2021, which represented more than 50 percent of all complaints received by the agency for that period. The CFPB found the three companies often failed to provide substantive responses.

The report found that consumers submitted more complaints about inaccurate information on their credit and consumer reports than about any other problem. Consumers most frequently asserted that the inaccurate information belonged to someone else, and consumers often described being victims of identity theft.

The FCRA requires Equifax, Experian, and TransUnion to review complaints sent to them through the CFPB where consumers allege there is incomplete or inaccurate information in their consumer reports and have attempted to fix the problem. The companies must report their actions for the complaints to the CFPB. The report found:

  • Equifax most often promised to open investigations and send the results to the consumers at later dates, but it would fail to provide the CFPB with the outcomes of the investigations.
  • TransUnion made similar promises and frequently failed to provide the outcomes of investigations to the CFPB. It often stated it would take no action on complaints because it believed the complaints were submitted by third parties.
  • Experian frequently stated it would take no action for many complaints because it believed the complaints were submitted by third parties, however, it did respond to the remaining complaints with substantive responses.

Overall, consumers described a consumer reporting system that does not work for them and the serious consequences that follow when inaccurate information is – and remains – on their consumer reports. Other key findings from the CFPB’s annual report of consumer and credit reporting complaints include:

  • Equifax, Experian, and TransUnion relied heavily on template complaint responses instead of providing meaningful and thorough responses to consumers, despite having up to 60 calendar days to respond.
  • Beginning in early 2020, Experian and TransUnion stopped providing substantive responses to consumers’ complaints if they suspected that a third-party was involved in submitting a complaint.
  • In many instances, Equifax and TransUnion promised to investigate but failed to provide the outcomes of their investigations to the CFPB and instead stated that they would forward the complaints to their “dispute channel.”

Federal law requires Equifax, Experian, and TransUnion to conduct a review of certain complaints sent to them by the CFPB to determine whether all of their legal obligations have been met with respect to the subject matter of the complaint and then to report their determinations and actions to the CFPB.

However, more than 50 percent of these complaints did not receive this review, based in part on their suspicions that the complaints were submitted by third parties. As a result, many consumers did not receive meaningful responses to complaints submitted through the CFPB complaint process.

In the report, consumers describe feeling frustrated and stressed when the nationwide consumer reporting companies’ automated processes for correcting inaccuracies do not work or when they do not get responses to their concerns. Consumers report that they spend time, energy, and money to try to correct inaccuracies.

“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” CFPB Director Rohit Chopra stated in a news announcement about the report. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

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