CFPB Accuses Big Credit Card Companies of Hurting Consumer Credit Scores by Failing to Report Payments
The Consumer Financial Protection Bureau (CFPB) has accused the six largest credit card companies in the U.S. of hurting their customers’ credit scores by failing to report their full payments to credit bureaus. The agency said that millions of credit card holders could see a jump in their credit scores of at least 20 points if the companies reported their monthly repayments.
“Credit card companies’ failure to report actual payment data means that millions of people’s credit reports are missing fundamental information about their credit card repayment behavior that could help many of them receive better financial offers and potentially save billions of dollars in interest expenses,” said John McNamara, the CFPB’s principal assistant director for markets, in a blog post.
American Express, Bank of America, Capital One Financial, Citigroup, Discover Financial Services, and JPMorgan Chase either never reported their payments or stopped reporting them in quick succession in 2013, the Bureau alleges. Last May, the CFPB asked the companies for more information on their practices, and asked if they ever furnished actual payment information.
In response to the CFPB, the credit card companies didn’t say when they would start reporting actual payment information again, and some even stated that they did not intend to do so. The responses also suggested that the companies suppressed data to make it more difficult for competitors to offer better services for customers.
However, suppressing data makes it harder for people to shop around for credit and save money, since people assume their credit card payments will be shown in their credit reports. The CFPB said it plans to continue addressing credit card company practices, and to brief law enforcement agencies and financial regulators on their findings.