The Consumer Financial Protection Bureau (CFPB) has sued Experian (LSE:EXP) – a firm best known for its credit reports. The CFPB claims that Experien “does not take sufficient steps to intake, process, investigate, and notify consumers about consumer disputes, resulting in incorrect information on consumer reports. Inaccurate or false information on consumer reports can threaten consumers’ access to credit, employment, and housing.”
CFPB Director Rohit Chopra said that when consumers challenge credit reports, Experian conducts “sham investigations.”
“Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”
The CFPB notes that the Fair Credit Reporting Act (FCRA) requires that consumer reporting agencies take steps to ensure consumer reports are accurate and to conduct investigations of information disputed by consumers.
The CFPB alleges that Experian is harming consumers by:
- Conducting sham investigations that fail to properly address consumer disputes: When handling disputes, Experian uses faulty intake procedures and does not accurately convey all relevant information about disputes to the original furnisher. Experian routinely and uncritically accepts the original furnisher’s response to the disputed information, even when that response was improbable or illogical on its face, or when Experian has other information available that suggests the furnisher is unreliable. At the conclusion of the investigation, Experian sends consumers notices that fail to inform them of the investigation results, and instead provides information that is confusing, ambiguous, incorrect, or internally inconsistent.
- Improperly reinserting inaccurate information on consumer reports: Experian has failed to implement basic matching tools that prevent or greatly reduce the likelihood of reinsertion by a new furnisher of a previously deleted tradeline. Instead, Experian improperly reinserts inaccurate information into consumer reports because it fails to match newly reported information with records of previously deleted information. Consumers who have disputed the accuracy of an account and thought that their consumer report had been corrected instead see the same inaccurate information reappear on their consumer report without explanation under the name of a new furnisher.