The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Experian, one of the largest nationwide consumer reporting agencies, for failing to adequately investigate consumer disputes. According to the CFPB, Experian’s practices result in the inclusion of incorrect information on consumer credit reports, posing risks to consumers’ access to credit, employment, and housing.
“When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law,” said CFPB Director Rohit Chopra. “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”
About Experian
Based in Costa Mesa, California, Experian is a subsidiary of Experian plc, a global data broker and analytics company headquartered in Ireland. As one of the nation’s three largest credit reporting conglomerates, Experian maintains data on most families in the United States. The company provides credit scores, credit reports, credit monitoring, and other related products to consumers and businesses. Experian collects information from data furnishers, such as banks, credit card companies, and debt collectors, and sells consumer reports to creditors and businesses to evaluate credit, employment, and housing opportunities.
Allegations Against Experian
The CFPB alleges that Experian has violated the Fair Credit Reporting Act (FCRA) by:
- Conducting Sham Investigations: Experian uses flawed intake procedures that fail to convey all relevant information about consumer disputes to original furnishers. The agency allegedly accepts furnishers’ responses uncritically, even when they are illogical or unsupported. Consumers receive notices with investigation results that are often confusing, incorrect, or inconsistent.
- Improperly Reinserting Inaccurate Information: Experian reportedly fails to implement tools to prevent the reinsertion of inaccurate information into consumer reports. This leads to consumers seeing previously disputed and corrected information reappear on their credit reports under the name of a new furnisher.
- Violating Consumer Protection Laws: Beyond FCRA violations, the CFPB claims Experian’s faulty dispute procedures and uncritical deference to furnishers’ responses constitute unfair practices under the Consumer Financial Protection Act.
The Importance of the FCRA
The FCRA mandates that consumer reporting agencies ensure the accuracy of consumer reports and conduct thorough investigations into disputed information. It also requires agencies to follow specific procedures before reinserting information previously removed due to disputes.
Impact on Consumers
Inaccurate credit reporting can significantly harm consumers by:
- Limiting access to loans, credit cards, and mortgages.
- Affecting employment opportunities where credit checks are required.
- Threatening access to rental housing or other critical services.
If you have experienced issues with credit reporting, it’s essential to know your rights and take proactive steps to dispute errors. Learn how to dispute inaccurate credit information.
Enforcement Action
Under the Consumer Financial Protection Act, the CFPB has the authority to take legal action against institutions that violate consumer financial protection laws. The CFPB’s lawsuit against Experian seeks to:
- Halt the company’s unlawful practices.
- Provide redress for harmed consumers.
- Impose civil monetary penalties, with funds directed to the CFPB’s victims relief fund.
FAQ
What are my rights under the FCRA? You have the right to dispute inaccurate information on your credit report and expect a proper investigation by the reporting agency.
How can I dispute errors on my credit report? You can file a dispute directly with the credit reporting agency. Learn more about the process here.
Source: Consumerfinance.gov
