Back to Basics, Continued—Credit Bureaus Now in the Crosshairs of the CFPB



I’ve written about credit reporting agencies a lot, and about consumer credit report complaints even more. This year seems to be the one in which the CFPB will turn its attention to credit reporting agencies and their complaint protocols.

The “Big Three” credit bureaus—Equifax, Experian and TransUnion—have seen a significant rise in the number of complaints lodged against them with the CFPB. The CFPB reported that in 2020, more than 50% of complaints received involved credit reporting, and that percentage increased to 60% in 2021. The most common complaint is that credit bureaus are making heavy use of “template responses” to close complaints. This has enabled the credit bureaus to reduce their average processing time while fewer consumers are receiving tailored answers to their specific problems.

Consumer finance companies and credit sellers are well aware of their responsibilities under the Fair Credit Reporting Act (FCRA) and Fair and Accurate Credit Transactions Act (FACTA) Furnisher Rule with respect to direct disputes lodged against them by customers. As long as the complaints are legitimate—not frivolous or irrelevant—they must be investigated by the company and a response and/or corrective action given and taken. The Furnisher Rule spells out this obligation. Companies also have a duty to respond to complaints lodged through the proprietary e-OSCAR protocol. See my discussion of Direct Dispute Complaints and e-OSCAR referred complaints here.

The CFPB is alleging that credit reporting agencies are using incorrectly Federal Trade Commission guidance as to dealing with credit repair organizations; and, this misapplication is allowing credit reporting agencies to sidestep their reinvestigation duties owed to consumers under the FCRA.

While it is not our role to tell our credit bureaus how to comply with their obligations under the FCRA, it is our responsibility to address complaints that come directly to us under the Furnisher Rule. See Back to Basics, Continued—Frivolous or Irrelevant Disputes; The Furnisher Rule Under the Fair Credit Reporting Act (FCRA), Back to Basics, Continued—The Obligation on Furnishers of Consumer Information, and Back to Basics, Continued – Responding to Frivolous or Irrelevant Direct Disputes for blogs addressing this responsibility.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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