If you’ve filed a complaint about incorrect information on your credit report, good luck: Your chances of having it resolved are slim and getting slimmer, the government’s consumer watchdog said Wednesday.
Out of all the complaints about inaccurate reports the Consumer Financial Protection Bureau sent along to the big three credit bureaus—Equifax, TransUnion, and Experian—just 2% resulted in customers getting relief in 2021, the CFPB said. That was down from 9% in 2020 and 25% in 2019.
“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” CFPB Director Rohit Chopra said in a release. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”
The government’s consumer watchdog received more than 700,000 complaints from consumers about the big three credit bureaus between January 2020 and September 2021, most frequently for inaccurate information appearing on credit reports, as in cases of identity theft, for example. Inaccurate information on credit reports can have severe financial consequences if the errors aren’t resolved quickly. Not only do lenders rely on such reports when deciding whether to give people mortgages and other consumer loans—and on what terms—but credit reports can also affect decisions about insurance, for instance.
Credit bureaus are required by law to respond to such complaints, but customers rarely see them successfully resolved, according to the agency’s report. In fact, all three of the major credit bureaus are responding to fewer and fewer complaints as time goes by, according to the CFPB analysis, with Equifax not reporting any customer relief at all for the past two quarters.
The credit bureaus’ response to complaints started dropping off at the beginning of 2020, when they began ignoring complaints they suspected were sent in by third parties such as credit repair companies, federal regulators said. But according to the CFPB, the bureaus are still obligated to respond to these complaints if the third party has permission from the consumer to make the complaint on their behalf.
Neither Equifax, TransUnion, nor Experian responded immediately to requests for comment. But in a 2020 letter to regulators, the Consumer Data Industry Association, a trade group representing credit reporting agencies, wrote that shady credit repair companies were abusing the CFPB’s website by flooding the system with fraudulent complaints.
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