RSSThe Consumer Financial Protection Bureau warned specialty consumer reporting agencies that they are required to make individual reports easily available to consumers who request them. Under the law, consumers have a right to one free report per year, from each agency.
The Dodd-Frank Act, which created the CFPB, gave it the authority to identify non-bank financial industries for supervision. One of the first it identified was the credit reporting industry. On Sept. 30, it began supervising credit reporting agencies.
The CFPB released this bulletin on Nov. 29 and issued warning letters (click here for a sample) to those that may be violating the law by failing to provide consumers the required streamlined process for accessing their reports. The American Banker newspaper reported in its Nov. 30 edition that the CFPB sent the warning letters to six specialty reporting agencies after conducting a review of 18 such companies.
The bulletin emphasizes that the Fair Credit Reporting Act, which the CFPB oversees, requires all nationwide specialty consumer reporting agencies to provide an easy way for consumers to get free access to their annual reports. Companies must provide a toll-free number that is published in every telephone directory in which a number for the company appears, and is clearly and prominently posted on the company’s website. In addition, federal law requires the company to have clear and easy instructions for consumers to get these reports, and adequate staff in place or means to deal with consumers’ requests.
Not all companies are required to give a free annual copy of your credit report, but all such companies must provide you a copy of your report for a fee. The CFPB has compiled a list of websites and toll-free numbers for 40 credit reporting agencies.
“Nationwide specialty consumer reporting agencies can have great influence over a consumer’s tenancy, insurance premiums, or even employment,” said CFPB Director Richard Cordray. “The CFPB is reminding these companies that they must follow the law and provide consumers with easy access to their free annual report. If we have reason to believe that companies are not following the law, we will take action.”
Nationwide specialty consumer reporting agencies primarily collect and provide specific types of information on a consumer’s history, such as check-writing, medical payments, tenancy, employment, or insurance claims. They are included in the larger industry category of consumer reporting agencies, which also includes credit reporting companies or credit bureaus. There are roughly 400 consumer reporting agencies in the United States, with three companies dominating the market – Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC. The CFPB is focusing on the 30 largest companies, that is, those with annual revenue in excess of $7 million.
The CFPB conducted a review of specialty consumer reporting agencies to determine whether they were making it easy for consumers to obtain the reports. The CFPB looked at phone listings and websites for nationwide specialty consumer reporting agencies across the country and also attempted to request reports. The review identified several problems, such as companies that are not listing toll-free numbers, and companies that have toll-free numbers but do not make it easy for consumers to request reports.
Companies that the CFPB believes have violated the requirement to provide consumers streamlined access to their reports could be subject to enforcement actions. Through its supervisory and enforcement functions, the CFPB will continue to monitor consumer reporting agencies to ensure compliance with this obligation and other federal consumer financial laws.
