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The Consumer Financial Protection Bureau has fined Equifax $15 million over errors related to consumer credit reports, saying the company failed to properly investigate disputed information, federal oversight said. The agency announced Friday.
Equifax is one of the three major credit bureaus in the United States, a group that also includes Experian and TransUnion.
“Equifax ignores consumer documents and evidence submitted with disputes, allows previously removed and inaccurate information to be reinserted into credit reports, and creates discrepancies that confuse consumers about the findings.” ” and used defective software code that resulted in inaccurate consumer credit scores,” according to the CFPB’s order.
Why is your credit report important?
A credit report is a ledger that records a consumer’s borrowing history, including loan payment history and bankruptcy filings.
Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group, said the economic impact of inaccurate information on these reports could be “severe.”
“It could change your ability to qualify for a loan, get a job, rent an apartment, all the very basic aspects of your personal life,” Rust said.
CFPB says Equifax process was ‘defective’
Equifax handles approximately 765,000 consumer disputes per month, according to the CFPB.
The CFPB alleges that Equifax violates the Fair Credit Reporting Act, saying the company’s “defective” dispute policies and technical deficiencies have been occurring since at least October 2017 and have resulted in “millions of “It put the person at a disadvantage.”
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Equifax called the allegations “[turn] CFPB long-term investigation page,” a company spokesperson wrote in an email.
The company has invested more than $1.5 billion in technology and infrastructure improvements over the past several years, including “significant changes” to dispute resolution and consumer support, a spokesperson said. Ta.
“Our purpose is to help people live their best lives financially, and we know that consumers and customers rely on our data to make important financial decisions. “I know,” they wrote. “One error that impacts consumers is one error too many,” they added.
The $15 million civil penalty follows a lawsuit the CFPB filed against another credit reporting company, Experian, on January 7, alleging that the company conducted “false” investigations into errors on credit reports. . In a statement on its website, Experian called the lawsuit “completely without merit” and “an example of irresponsible overreach.”
“Credit bureaus have been repeatedly accused of this type of conduct,” said Chi Chi Wu, senior lawyer at the National Consumer Law Center. “These are issues that have been around for decades,” she says.
The 2017 Equifax data breach also compromised the personal information of 147 million consumers, and the company ultimately agreed to a $700 million settlement.
How to keep your credit report “hygienic”
Consumers should check their credit reports at least once a year, Last said. The Federal Trade Commission also recommends testing before applying for credit, loans, insurance, or jobs.
Consumers need to make sure they know their identity on their credit report, such as address and Social Security number, and ensure that account information, such as debt balances and delinquency status, is correct.
“This is just good financial hygiene practice,” Rust said.
Importantly, a credit report is different from a credit score. The latter is a compiled numerical output of information about a consumer’s credit report.
“If you see a sudden change in your credit score, that’s a signal,” Rust says.
The three major credit bureaus allow consumers to request a free copy of their credit report once a week. Consumers may request a copy at AnnualCreditReport.com or by calling 1-877-322-8228. (Other sites may charge consumers or be deceptive, according to the Federal Trade Commission.)
What to do about credit report errors
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Consumers who discover errors on their credit reports must dispute them in writing with documentation. Send it by mail to the credit bureau and request a return receipt, Wu said. He said consumers are more likely to have their issues resolved by mail than online.
Consumers should also file complaints with the CFPB and state attorney general’s office, Wu said.
Consumers can request that their dispute statement be included in their files and future credit reports, and they can also request that their dispute statement be included in their files and future credit reports, as well as share the statement with anyone who has recently received a copy of their report, Wu said. You can also ask the credit bureau to provide it to you.
Consumers who are unable to correct the error despite repeated attempts may want to consult an attorney, she said.
“Not every mistake is worth litigating,” she says. “But if your loan is higher because of an error on your credit report, that’s where the real harm comes from.” [for which] You may want to consider litigation. ”
Wu said you may be able to find a lawyer through groups such as the National Association of Consumer Advocates.
