The Consumer Financial Protection Bureau (CFPB) filed suit against Experian, accusing the nationwide consumer reporting agency of failing to properly investigate consumer disputes as required under the Fair Credit Reporting Act (FCRA).
The lawsuit asserted Experian repeatedly neglected to take sufficient steps to intake, process, investigate, and notify consumers regarding consumer disputes. Inaccurate information frequently appeared on consumer credit reports as a result, which the bureau said can threaten 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,” CFPB Director Rohit Chopra said. “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”
Experian is one of the nation’s three largest credit reporting conglomerates. It gathers information from consumer reports furnished by banks, credit card companies, and debt collectors. The consumer reporting agency sells its consumer reports to creditors and businesses who evaluate whether to offer a consumer various products, services, and opportunities — such as a loan, employment, or housing.
The CFPB alleged Experian violated the FCRA’s requirements for handling consumer disputes in numerous ways. Specifically, the CFPB alleged Experian is harming consumers by conducting “sham investigations” and “improperly reinserting inaccurate information on consumer reports.” The complaint also alleged Experian failed to implement basic tools designed to prevent or reduce the likelihood of inaccurate information previously deleted by a data furnisher.
According to the complaint, Experian violated both the FCRA and the Consumer Financial Protection Act (CFBA) “by failing to reasonably reinvestigate consumer disputes challenging the accuracy or completeness of information in consumer reports, including by failing to forward all relevant information to furnishers, failing to provide adequate or accurate notice to consumers of the outcome of their disputes, and failing to utilize reasonable procedures to ensure the accuracy and completeness of information in consumers’ files.”
Experian’s dispute intake procedures were also questioned in the complaint. The CFPB claimed the company failed to provide furnishers with consumer-submitted documentation, uncritical deference to furnishers’ responses to disputed information, and that failure to prevent improper tradeline reinsertions also violate the CFBA’s prohibition on unfair acts or practices.
“When a consumer disputes the accuracy or completeness of information in their consumer report, the FCRA requires Experian to conduct a ‘reasonable reinvestigation’ of the disputed information and report the results of the reinvestigation to the consumer, all within certain timelines,” the complaint stated. “At the conclusion of the reinvestigation, Experian must modify or delete any item of information found to be inaccurate or incomplete, or that it could not verify. For any information deleted as a result of a dispute, the FCRA imposes specific obligations on Experian that must be satisfied before that information may be reinserted into a consumer’s file.”
The CFPB’s website includes a host of resources meant to educate consumers about their rights under the FCRA and to help them manage their credit scores.