More than half of the complaints submitted to the Consumer Financial Protection Bureau from January 2020 through last summer involved major credit bureaus Equifax, Experian and TransUnion, according to a Jan. 5 CFPB report.
Most of those approximately 700,000 complaints relate to inaccurate information on customers’ credit and consumer reports. “Consumers most frequently assert that the inaccurate information belongs to someone else, and consumers often describe being victims of identity theft,” the bureau said.
According to the CFPB, those findings reveal how changes in complaint responses by the companies caused fewer meaningful responses to consumers: Last year, the three companies reported relief in fewer than 2 percent of covered complaints, down from nearly 25 percent in 2019.
Equifax, Experian and TransUnion are required under federal law to review certain complaints sent to them by the CFPB to decide whether their legal obligations have been met and then report their determinations and actions to the CFPB. The report found that beginning in early 2020, Experian and TransUnion “stopped providing substantive responses to consumers’ complaints if they suspected that a third party was involved in submitting a complaint,” and often failed to report the outcomes of their investigations to the CFPB, instead moving toward a “dispute channel.”
“As a result, many consumers did not receive meaningful responses to complaints submitted through the CFPB complaint process,” according to the report. “Overall, consumers describe feeling frustrated and stressed when the nationwide consumer reporting companies’ automated processes for correcting inaccuracies do not work or when they do not get responses to their concerns. Consumers report that they spend time, energy, and money to try to correct inaccuracies.”
According to the report, Equifax and TransUnion often promised to open investigations and send the results to consumers later, but would “fail to provide the CFPB with the outcomes of the investigation.”
CFPB Director Rohit Chopra believes those findings indicate a larger problem. “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” he said. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”