CFPB Releases Report on Consumer Reporting Agency Complaints
Written By: Joel Palmer, Op-Ed Writer
The three nationwide consumer reporting agencies (NCRAs) are providing better responses to complaints, but many problems remain related to the accuracy of consumer data.
That is according to an annual report released last week by the Consumer Financial Protection Bureau (CFPB). The bureau is required by law to submit an annual report about complaints submitted by consumers regarding the three NCRAs: Equifax, Experian and TransUnion.
“TransUnion, Equifax, and Experian routinely top the list of complaints submitted by consumers,” said CFPB Director Rohit Chopra. “We will be exploring new rules to ensure that they are following the law, rather than cutting corners to fuel their profit model.”
CFPB noted that the agencies performed better in this year’s report on addressing consumer complaints than previous years.
In last year’s report, CFPB concluded that, in most instances, the NCRAs did not satisfy their obligations to review certain complaints and to report outcomes to the CFPB. Instead, the NCRAs failed to review most complaints based on unsubstantiated conclusions of suspected third-party involvement, and referred some complaints to their dispute channels without reporting the outcomes to the CFPB.
As a result, in 2021, the NCRAs closed complaints faster and with lower rates of reported relief. Reported relief, which is typically changes to a consumer’s credit report, fell to less than 2 percent of complaints down from nearly 25 percent of complaints in 2019.
This year, the agencies relied less on third parties and referrals to resolve disputes, leading to more substantive responses, CFPB reported. In addition, all three NCRAs provided a tailored response to more than 50 percent of complaints that were closed with explanation or relief.
“The CFPB, however, continues to hear from consumers about a familiar list of challenges. Consumers, including service members and older consumers, continue to report that inaccurate information appears on their credit reports. They describe encountering problems disputing inaccurate information. They report first learning about purported debts—such as medical bills—by reviewing their report,” the report stated.
With more complete complaint response information being provided by the NCRAs to the CFPB and consumers, CFPB said it is able to glean more information about the accuracy of information on consumers’ reports and their success in having problems addressed.
With this insight, CFPB concluded that many consumers report the same problem to the three NCRAs sometimes, yet receive three different outcomes. Consumers can use one submission process to submit complaints about up to four companies. When consumers raise the same problem to all three NCRAs, CFPB is able to compare the outcomes across the NCRAs. Sometimes these outcomes differ dramatically, the report stated.
The report also found that consumers who request that the NCRAs correct information on their report sometimes have the wrong information changed.
The CFPB recommends that Equifax, Experian, and TransUnion consider how automated processes can negatively impact consumers. They should also consider how to enable consumers to participate more in creating their reports.
The annual report mainly covers complaints about all consumer reporting complaints that CFPB received between October 2021 and September 2022. During this period, CFPB received nearly one million credit or consumer reporting complaints. The bureau sent nearly half of those to the three NCRAs for response.
In complaints about the NCRAs to CFPB, more than 93 percent of consumers reported having previously attempted to fix their problem with the company.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
