A recently released Consumer Financial Protection Bureau (CFPB) report explores how changes in complaint responses provided by nationwide consumer reporting companies resulted in fewer meaningful responses.
The CFPB indicated that the annual report of credit and consumer reporting complaints also showed less consumer relief. Last year, the consumer reporting companies Equifax, Experian, and TransUnion combined to report relief in response to less than 2 percent of covered complaints, representing a decline from nearly 25 percent of covered complaints in 2019.
“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” CFPB Director Rohit Chopra said. The report serves as further evidence of the harms stemming from what he described as the consumer reporting companies’ faulty financial surveillance business model.
The CFPB said over 200 million Americans have credit files, with lenders relying on the information contained to decide whether to approve loans and terms. Consumer reporting informs decisions regarding employment, insurance, housing, and essential utilities.
Credit report inaccuracies increase the cost of credit and limit opportunities to start a small business or buy a new home, according to the CFPB.
Report findings, per the CFPB, include Equifax, Experian, and TransUnion placing heavy emphasis on template complaint responses rather than providing thorough responses to consumers, although having up to 60 calendar days to respond; in early 2020, Experian and TransUnion refrained from providing essential responses to consumers’ complaints if they suspected that a third-party was involved in submitting a complaint; and in a number of instances Equifax and TransUnion promised to investigate consumer complaints but failed to provide investigation outcomes to the CFPB while indicated stated they would forward the complaints to their dispute channel.