CFPB sues Experian for sham investigations of credit report errors

Following this announcement, the CFPB alleges that Experian did not take sufficient steps to intake, process, investigate, or notify clients about customer disputes, which resulted in the overall inclusion of incorrect information on credit reports. These represent a great threat to users’ access to credit, employment, and housing, which can further result in serious consequences for their finances. 

More information on Experian’s credit report errors

Information in consumer reports is provided to Experian by data furnishers, including banks, financial institutions, credit card companies, and debt collectors. The consumer reporting agency sells its consumer reports to creditors and businesses who are evaluating whether to offer a client several products, services, and opportunities (such as a loan, employment, or housing), or not. 

The Fair Credit Reporting Act (FCRA) requires that consumer reporting agencies take steps to ensure that client reports are accurate, as well as to conduct investigations of information disputed by consumers. The FCRA provides people with multiple ways to dispute inaccurate information on their consumer reports, including the process of contacting user reporting agencies directly. At the same time, the FCRA also requires that consumer reporting agencies follow certain procedures before reinserting information that has previously been removed as the result of a dispute.

According to the official press release, the CFPB alleges that Experian has violated several FCRA requirements and harmed customers by conducting sham investigations that failed to properly address client disputes (when handling disputes, Experian leveraged faulty intake procedures and did not accurately convey all relevant information about disputes to the original furnisher, while sending consumers notices that failed to inform them of the investigation results, and instead provided information that was confusing, ambiguous, incorrect, or internally inconsistent), as well as improperly reinserting inaccurate information on user reports (the company did not implement basic matching tools that prevented or reduced the likelihood of reinsertion by a new furnisher of a previously deleted tradeline, a process which let customers see the same inaccurate information reappear on their report without explanation).