Credit Reporting: Covered Complaints

Credit reporting companies play a critical role in the lives of consumers, as they are responsible for collecting and maintaining information about our financial behaviors and histories. However, these companies can also cause significant harm by reporting inaccurate or incomplete information or even failing to address covered complaints in a timely and appropriate manner.

Inaccurate Credit Reporting

One common type of complaint that consumers have about inaccurate credit reporting is incomplete information. Credit reports that have inaccurate credit reporting usually contain errors, such as incorrect account balances or past-due payments, which can negatively impact a consumer’s credit score and ability to get loans or other financial products. In addition, some credit reporting companies may simply refuse to correct mistakes or update outdated information in a timely manner, further harming the consumer.

How Do You Dispute Erroneous Credit Report?

To dispute an erroneous account with a credit reporting company, consumers should first review their credit report for any inaccuracies and submit a written dispute to the appropriate Credit Reporting Agency (CRA) describing the error in detail. It is also important to keep records of all correspondence with the CRA and continue following up until the issue has been resolved. Check your credit for free.

Covered Complaints

Even if you properly submit a credit dispute, a growing number of consumers have complained to regulators that credit reporting companies often fail to address complaints in a satisfactory manner. Credit reporting companies are required by law to investigate any disputed information on a consumer’s credit report, but they may not always do so thoroughly. This can leave consumers feeling frustrated and powerless after taking lengthy steps to have their individual credit files corrected. This is especially so if the consumer is relying on their credit score to qualify for important financial products such as a mortgage or auto loan.

Looking At The Pattern of Complaints

In 2021, Equifax, Experian, and TransUnion together reported relief in response to less than 2% of covered complaints, down from nearly 25% of covered complaints in 2019. That drop in response, caught the attention of the Consumer Financial Protection Bureau (CFPB) after consumers submitted more than 700,000 complaints to the agency. This represented more than 50% of all complaints received from January 2020 through September 2021.

The CFPB expects credit reporting companies to provide complete, accurate and timely responses to consumer disputes yet consumers submit more complaints about inaccurate information on their credit and consumer reports than about any other problem. As a result, the agency released a 2022 report detailing consumer complaint response deficiencies with Equifax, Experian and TransUnion.

Consumer Advocate Andy Spears, who blogs about a range of consumer protection issues, said,

“The bottom line is vigilance is necessary in order to hold the credit bureaus accountable. These reporting agencies won’t simply correct their behavior – consumers must take action, sometimes repeatedly, to get their attention.”

Key Findings Of CFPB Report

Overall, consumers describe a consumer reporting system that is not working for them and the serious consequences that follow when inaccurate information is—and remains—on their consumer reports. Other key findings from the report 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.”

Consumers Have Legal Rights

The Fair Credit Reporting Act (FCRA) is a federal law that promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Under the FCRA, both furnishers of information to CRAs and CRAs are required to take steps to ensure the maximum possible accuracy of their information.

Additionally, the CFPB recommends that consumers be aware of their rights and options when it comes to dealing with credit reporting errors. If you have submitted a complaint to a credit reporting company and believe that the company has not adequately responded, you may have legal recourse.

An experienced consumer protection attorney can help someone determine the strength of their case if they have been negatively impacted by a credit reporting company and whether they have grounds to take legal action for failure to address complaints. Reporting covered complaints to the CFPB can also help ensure that consumers have a fair and accurate credit reporting system.

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Led by attorneys Michael D. Finn and J. Andrew Meyer with over 75 years of experience, the Finn Law Group is a consumer protection firm dedicated to protecting the rights of consumers. Contact our office for a free consultation if you feel that need legal counsel to resolve a credit related dispute. This article is provided for informational purposes only and should not be construed as legal advice.