The CFPB has been monitoring the credit reporting industry and doesn’t like what it’s seeing. The bureau is demanding the improvement of data accuracy, repair of “broken” dispute processes and cleanup of the consumer data being provided to credit reporting companies.
The CFPB released a report on March 2 outlining the problems it detected in the credit reporting industry and the measures it took to address them through its oversight. The bureau’s examination of the credit reporting industry revealed some credit reporting agencies lacked sufficient quality control procedures to verify the accuracy of consumer records. The CFPB ordered them to improve their procedures. As a result, bureau examiners noticed improved quality control programs that included tests to determine that credit reports were for the correct consumer and that their files were in order. The companies also put in place measures to take quick action when mistakes are found and to ensure those mistakes don’t happen again, according to the CFPB.
Correcting Problems in Credit Reporting
Examiners found credit reporting companies weren’t following federal procedures by failing to send consumers notice of the results of consumer disputes. The Fair Credit Reporting Act requires that following an investigation, credit reporting agencies provide written notice of the results to consumers within five business days after the investigation has been completed.
During reviews of banks and other consumer credit information providers, the CFPB reported “widespread problems” with incorrect information being sent to credit reporting companies. The bureau ordered the providers of the information to take steps to ensure the veracity of the information by maintaining evidence they are conducting proper investigations and accurately handling disputes. Since then, these companies have dedicated more resources to improved investigations to mitigate and fix incorrect information and improve handling of disputes.
“Since we began our oversight work [in 2012], the CFPB has been uncovering and correcting problems in the consumer reporting industry,” said CFPB Director Richard Cordray. “Because of our work, important improvements are being made. Much more work needs to be done, but our corrective actions are leading to positive changes that are benefiting consumers all over the country.”
Credit reporting ranked third in the latest CFPB Monthly Complaint Report with 4,620 complaints in February, a 24 percent increase from the previous month. The CFPB has received approximately 185,700 credit reporting complaints since July 21, 2011, making credit reporting the third-most complained about product, representing 17 percent of total complaints.
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