Consumer Financial Protection Bureau and Credit Reports

from the inbox:

Today the Consumer Financial Protection Bureau (CFPB) began accepting consumer complaints about credit reporting, giving consumers individual-level complaint assistance for the first time at the federal level.

 

"Credit reporting companies exert great influence over the lives of consumers. They help determine eligibility for loans, housing, and sometimes jobs,” said CFPB Director Richard Cordray. “Consumers need an avenue of recourse when they feel they have been wronged.”

 

Consumer reporting agencies, which include what are popularly called credit bureaus or credit reporting companies, are private businesses that track a consumer’s credit history and other consumer transactions. The credit reports they generate – and the three-digit credit scores that are based on those reports – play an increasingly important role in the lives of American consumers.

 

The largest credit reporting companies issue more than 3 billion consumer reports a year and maintain files on more than 200 million Americans. The consequences of errors in a consumer report can be catastrophic for a consumer, shutting him or her out of credit markets, jeopardizing employment prospects, or significantly increasing the cost of housing.

 

Although a small number of large businesses dominate the credit reporting market, there are many consumer reporting agencies in the United States. The market includes: the three largest credit reporting companies that sell comprehensive consumer reports; consumer report resellers that repackage information they buy from the largest companies; and specialty consumer reporting companies that primarily collect and provide specific types of information like on payday loans or checking accounts.

 

For consumers who believe that there is incorrect information on their credit reports or who have an issue with an investigation, before filing with the CFPB, they should first file a dispute and get a response from the consumer reporting agency itself. There are important consumer rights guaranteed by federal consumer financial law that may be best preserved by first going through the credit reporting company’s complaint process. Once that process is complete, if the consumer is dissatisfied with the resolution or if the consumer reporting agency does not respond, the CFPB is available to assist.

 

A consumer can come to the CFPB if he or she, for example, has issues with:

·         Incorrect information on a credit report;

·         A consumer reporting agency’s investigation;

·         The improper use of a credit report;

·         Being unable to get a copy of a credit score or file; and

·         Problems with credit monitoring or identity protection services.

 

Today’s announcement extends the kinds of complaints the CFPB already handles. The CFPB began taking credit card complaints when it launched on July 21, 2011. Since then, it has expanded to take complaints on mortgages, bank accounts and services, consumer loans, and private student loans.