The three biggest credit bureaus caused more angst among consumers last year than even old relief firms like debt collectors, according to a new study.
As theThe financial situation of many Americans, complaints about the behavior of financial companies to the Consumer Financial Protection Bureau more than doubled in 2020. This is according to the US PIRG Education Fund, which studied grievances filed with the CFPB in the year last.
Complaints about issues with financial companies rose more than 50% to 444,551 in 2020, with more than half of grievances filed with the CFPB against Experian, TransUnion and Equifax, according to the analysis.
Nearly nine in ten credit reporting complaints were with one of the three major credit bureaus, Experian with 86,600 complaints, TransUnion 83,300 and Equifax 76,300, according to findings released Monday.
Of the 282,000 credit report complaints, the majority were about issues with “incorrect information on your report,” and most complaints were about issues labeled as “the information belongs to someone else”. In addition to misinformation, the second and third most criticized issues concerned the handling of the problem by a credit bureau and debt collectors trying to collect outstanding debts.
The results found half of CFPB complaints involved the credit agencies., when the defense group
Although this is not new, the Federal Trade Commission of 2012 found one in five Americans had an error that was corrected by a credit reporting agency after being disputed on at least one of three credit reports – mistakes can be costly.
The Big Three credit bureaus collect data on consumer credit histories, which they sell to lenders and other businesses who want to assess potential customers. But the data is also invaluable to crooks, who can use it for identity theft or other criminal activity.
Concrete example: Equifax in 2019$ 700 million to be settled with the FTC and others for a massive data breach two years earlier that exposed the private data of nearly 150 million people.
Lower scores, denial of credit
Errors in credit reports can also mean lower scores and denial of credit, housing, or employment.
Releasing its report, the U.S. PIRG called for reforms, including improving the dispute resolution process for credit report errors, greater access to free credit scores and obligation for credit bureaus to obtain consumer consent before giving third parties access to credit reports. The advocacy group also urged holding companies to report misinformation by fining them.
Finally, the group is promoting a proposal that would replace credit bureaus with a public credit registry.
Francis Creighton, president and CEO of the Consumer Data Industry Association, responded on behalf of the credit bureaus, defending their reports as having a 97% accuracy rate.
“Internal industry data indicates that there is no evidence that complaint activity reflects an issue with credit reports,” Creighton said in an emailed statement.