CFPB Cites Six Consumer Reporting Agencies for Hiding Free Reports

By Witkowski, Rachel | American Banker, November 30, 2012 | Go to article overview

CFPB Cites Six Consumer Reporting Agencies for Hiding Free Reports


Witkowski, Rachel, American Banker


Byline: Rachel Witkowski

WASHINGTON a The Consumer Financial Protection Bureau said Thursday it has issued warning letters to six specialty reporting agencies for making it too difficult for consumers to find their free annual reports.

The move marked the first time the CFPB has threatened to take action against such agencies, which collect information on checking account activity, gambling debts, employment history and medical bills. They are required by law to give consumers a free report annually through a "streamlined process."

But the CFPB said many firms are not doing so. The agency conducted a review of 18 nationwide specialty consumer reporting companies by looking on websites, calling phone numbers and even requesting the entity to run an individual report.

In some cases when asking for a free report, "we encountered entities where that was a puzzling question for them," said Kent Markus, the CFPB's assistant director for enforcement, in a conference call with reporters. "They were not familiar with or accustomed to providing it."

There are roughly 400 consumer reporting agencies nationwide including the three main agencies: Equifax Information Services LLC, Experian Information Solutions Inc. and TransUnion LLC. Their information is most often purchased by potential employers or companies such as banks when opening an account.

The reports "can impact whether the consumer gets a checking account, an apartment or even a job," Markus said. "Thus, the accuracy of the report is critical."

The CFPB sent warnings letters to six companies, asking each to respond with steps it has or will take to stay in compliance with the law; or explain why the law does not apply to them, Markus said. This is the first step the agency will take against practices that have long been used among some specialty consumer reporting entities, observers said.

"The CFPB, by design, is addressing practices in all aspects of consumer finance that to this point, have gone largely unchecked," said Greg McBride, senior financial analyst at Bankrate. …

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