CFPB Releases Massive Study on Credit Reports

American Banker, December 14, 2012 | Go to article overview

CFPB Releases Massive Study on Credit Reports


Byline: Rachel Witkowski

WASHINGTON a Consumers disputed up to 38 million items on their consumer credit reports last year at the three largest consumer reporting agencies, according to a report released Thursday by the Consumer Financial Protection Bureau.

Exactly how many of those issues were resolved is unclear, but the report was the first attempt by the consumer agency to collect details on the nation's largest credit agencies: Equifax Information Services, Experian Information Solutions and TransUnion.

"Credit reporting is a critical market at the heart of our lending systems," CFPB Director Richard Cordray said in a press call Wednesday. "Given its enormity, given its influence over people's lives and given its wide impact on our overall economy, you can see that there is much at stake in ensuring that it works properly for consumers."

Though the CFPB cautioned it was not drawing conclusions from the 48-page report, the statistics revealed deep fractures in the accuracy of the massive credit reporting system.

For example, the three largest agencies were contacted 8 million times by consumers about disputed items in their credit report last year. These disputes vary, including allegations of miss-matched personal information to identity theft to inaccurate debt collections.

Most of those disputes, or nearly 40%, were linked to some form of debt collection. The study also found that consumers were the main group watching for accuracy of the reports, which is concerning since only one in five people check their reports in a given year.

"We found the information provided by the collections or debt buying industry is more likely to be questioned by a consumer than, say, the data from their mortgage lender," Cordray said. "In fact, the information provided by the collections industry is five times more likely to be disputed than mortgage information."

How the credit agencies handle the disputes is also a "source of controversy," the report said. The agencies most often send the disputes back to the original data provider, called a "furnisher," which includes banks and credit card companies, through an automated system of simple codes. …

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