Elijah Nouvelage/Bloomberg via Getty Images
Consumer Financial Protection Bureau fined Ikefax $15 million lost due to consumer-related errors credit reportFederal regulators announced Friday that they accused the company of failing to conduct a proper investigation into the disputed information.
Equifax is one of the three largest credit reporting agencies in the United States, a group that also includes Experian and TransUnion.
“Equifax ignored disputed documents and evidence submitted by consumers, allowed inaccurate information that had been previously removed to be reinserted into credit reports, provided consumers with confusing and conflicting letters about its findings, and used misleading information to Flawed software code leads to inaccurate consumer credit scores. Order.
Why credit reports are important
A credit report is a ledger of a consumer’s borrowing history, such as loan payment history and bankruptcy filings.
Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group, said inaccurate information in these reports could have “serious” financial consequences.
“It can change your ability to get a loan, get a job, rent an apartment, all kinds of things that are critical to your personal life,” Rust said.
CFPB says Equifax processes were ‘flawed’
The CFPB said Equifax handles about 765,000 consumer disputes each month.
The CFPB said its “flawed” dispute policies and technical glitches, which have occurred since at least October 2017, “harmed millions of consumers” and accused Equifax of violating the Fair Credit Reporting Act.
More from Personal Finance:
Experts’ predictions for interest rates in 2025
More than 1 million people receive student debt relief by 2024
Nearly half of credit card users are in debt
An Equifax spokesperson wrote in an email that the company’s resolution of the allegations “closes the page on the CFPB’s long-running investigation.”
The company has invested more than $1.5 billion in technology and infrastructure improvements over the past few years, including “significant changes” to its dispute process and consumer support, a spokesperson said.
“Our purpose is to help people achieve their best financial situation, and we know consumers and our customers rely on our data to make important financial decisions,” they wrote. “Even if a consumer-impact A mistake, too many mistakes.”
The CFPB filed a lawsuit against Experian, another credit bureau, on January 7 and subsequently imposed a $15 million civil penalty. accusation The company conducted a “bogus” investigation into credit report errors. In a statement on its website, Experian says The lawsuit has “completely no legal basis” and is “an example of irresponsible overreach.”
“Credit reporting agencies have been sued for this type of behavior many times,” said Wu Qiqi, a senior attorney at the National Consumer Law Center. “These are issues from decades ago,” she said.
Equifax also suffered a data breach in 2017 Leakage of personal information 147 million consumers, companies finally agree settle down $700 million.
How to keep your credit report “hygienic”
Rust said consumers should check their credit reports at least once a year. The Federal Trade Commission also recommend Check before applying for credit, loan, insurance or job.
Consumers should make sure they identify identifying information on their credit reports, such as addresses and Social Security numbers, and Verify Account information such as debt balance and delinquency status is correct.
“It’s just good financial hygiene,” Last said.
Importantly, a credit report is not the same as a credit score. The latter is a digital output compiled from consumer credit report information.
“If you see a sudden change in your credit score, that’s a sign,” Last said.
Three major credit bureaus allow consumers to request free copies of their credit reports once a week. Consumers may request copies at: annualcreditreport.com and call 1-877-322-8228. (Other websites may charge consumers or engage in deceptive practices. according to Filed with the Federal Trade Commission.
What to do about credit report errors
The Smith Collection/Gadot | Archive Photo | Getty Images
Consumers who discover errors on their credit reports should file a dispute in writing and attach documentation. Send it by mail to the credit bureau and ask for a return receipt, Wu said. Consumers are more likely to resolve their issues via email than online, she said.
Wu said consumers should also file complaints with the CFPB and its state attorney general’s office.
Consumers can request that the disputed statement be included in their files and future credit reports, Wu said, and can also ask the credit bureau to provide the statement to anyone who recently received a copy of their report.
Consumers who can’t fix their errors after multiple attempts may want to consult an attorney, she said.
“Not every mistake warrants a lawsuit,” she said. “But if your loan ends up being more expensive because of a credit report error, then that’s a real injury where you might want to consider a lawsuit.”
They may be able to find a lawyer through the following organizations National Association for the Protection of Consumer Rights and InterestsWu said.
