CFPB Report Claims Credit Bureaus Deficient in Responding to Consumer Complaints

A recent analysis by the Consumer Financial Protection Bureau (CFPB) found that the three major credit reporting agencies—Equifax, Experian, and TransUnion—reported relief in response to less than 2 percent of covered complaints, a decline from nearly 25 percent of covered complaints in 2019. The Bureau alleges that changes in complaint responses “resulted in fewer meaningful responses and less consumer relief.”

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

Complaints to the CFPB about the credit reporting companies more than doubled from 2019 to 2020. Most of the consumer complaints regarded inaccurate information on their credit and consumer reports. Consumers also complained about automated systems that made it harder to correct faulty information, burdensome dispute processes, and surprise debts reported to the companies without consumers’ knowledge.

Equifax, Experian, and TransUnion have relied heavily on template complaint responses instead of giving thorough and meaningful answers to consumers, even though they have 60 days to respond. The CFPB also alleged that the companies frequently ignore complaints when they think a third-party credit-repair company is involved and forward complaints to their general dispute channels, so the CFPB is less able to track the outcomes.

The Washington Post stressed the importance of reporting accurate consumer information, as low scores can disqualify consumers from home mortgages, housing rentals, and credit cards. Lower scores often result in consumers paying higher interest rates and having costlier loan payments.

President Biden campaigned on a pledge to create a public credit reporting agency within the CFPB, but Congressional Republicans oppose the plan. Additionally, the CFPB may institute new rules on how agencies correct errors, including requiring them to treat any debt under dispute as an error until they can prove its legitimacy.