For over a decade, consumer advocates have complained of a credit reporting system plagued with preventable errors, and a broken dispute system that utterly fails to conform to requirements of the Fair Credit Reporting Act (FCRA). These complaints have been confirmed by numerous courts, journalists, and now a report from the Consumer Financial Protection Bureau (CFPB).
- Credit reports are plagued by inaccuracies, such as files mixing the identities of consumers; errors caused by debt collectors, creditors and other furnishers of information; and the fallout caused by identity theft. Whether the percentage of errors is 33% or 1%, it is too high, especially when the errors are easily preventable with straightforward measures.
- The nationwide consumer reporting agencies (CRAs) – Equifax, Experian, and TransUnion — are in gross violation of the FCRA’s requirements to conduct “reasonable” investigations when consumers dispute errors in their credit reports. Instead of hiring trained personnel to conduct real investigations, the nationwide CRAs have developed a perfunctory automated system that consists of nothing more than translating a consumer’s dispute into a two- or three-digit code, forwarding that code and a one-page electronic form to the furnisher, and parroting whatever the furnisher states in response.