Quick Telecast
Expect News First

Lawmakers Scrutinize Credit-Reporting Companies’ Handling of Consumer Complaints

0 59


Lawmakers are probing how

Equifax Inc.,

EFX 2.14%

Experian

EXPGY 0.73%

PLC and

TransUnion

TRU 0.55%

handled consumer complaints about errors on their credit reports during the pandemic.

Democrats on the House Select Subcommittee on the Coronavirus Crisis informed the companies of the probe Wednesday morning, according to letters viewed by The Wall Street Journal.

In the letters, the lawmakers said payment-deferment programs and an increase in identity theft during the pandemic created new ways for errors to get added onto credit reports. The letters, signed by South Carolina Democrat James Clyburn, the subcommittee’s chairman, ask the companies to provide documents about how they handle responses to complaints.

Representatives for Equifax, Experian and TransUnion didn’t comment.

The credit-reporting industry is “committed to helping consumers resolve discrepancies on their credit reports,” said a spokesman for the Consumer Data Industry Association, which represents credit-reporting firms. “We are working diligently across the financial ecosystem to make sure data on consumer credit reports is accurate and comprehensive.”

Industry representatives have said the errors are often the result of incorrect information provided by lenders. Many complaints, they have said, come from people who are trying to remove legitimate negative information, such as payments that they actually missed.

Lenders rolled out sweeping deferment and forbearance programs for struggling borrowers in the pandemic’s early days. A provision in Congress’s first coronavirus stimulus package barred lenders that offered such options from recording the missed payments as late.

Errors can lower consumers’ credit scores and make it harder for them to get approved for financing or obtain affordable loans. Landlords also look at credit reports when reviewing rental applications.

The credit-reporting companies made “changes to their complaint response processes early in the crisis that predictably resulted in a significant decrease in responsiveness,” the letters say. That included using automated reviews to identify complaints suspected of having been submitted by a third party and using this as a reason to dismiss complaints, according to the letters.

The Consumer Financial Protection Bureau is separately investigating how Equifax, Experian and TransUnion handle consumer disputes, the Journal previously reported. 

Consumers submitted more than 700,000 complaints to the CFPB regarding Equifax, Experian and TransUnion between January 2020 and September 2021, according to the regulator. That is more than half of all the complaints the agency received during that stretch.

Credit-reporting companies are closing consumer complaints faster and are offering less relief, the CFPB said in a January report based on a review of its complaints database. The credit-reporting companies told the CFPB that they provided relief on less than 2% of complaints that consumers sent to the regulator in 2021 about incomplete or erroneous information on their credit reports. That was down from nearly 25% in 2019, the CFPB said.

Write to AnnaMaria Andriotis at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the May 26, 2022, print edition as ‘Lawmakers Set to Scrutinize Credit-Reporting Companies.’


Lawmakers are probing how

Equifax Inc.,

EFX 2.14%

Experian

EXPGY 0.73%

PLC and

TransUnion

TRU 0.55%

handled consumer complaints about errors on their credit reports during the pandemic.

Democrats on the House Select Subcommittee on the Coronavirus Crisis informed the companies of the probe Wednesday morning, according to letters viewed by The Wall Street Journal.

In the letters, the lawmakers said payment-deferment programs and an increase in identity theft during the pandemic created new ways for errors to get added onto credit reports. The letters, signed by South Carolina Democrat James Clyburn, the subcommittee’s chairman, ask the companies to provide documents about how they handle responses to complaints.

Representatives for Equifax, Experian and TransUnion didn’t comment.

The credit-reporting industry is “committed to helping consumers resolve discrepancies on their credit reports,” said a spokesman for the Consumer Data Industry Association, which represents credit-reporting firms. “We are working diligently across the financial ecosystem to make sure data on consumer credit reports is accurate and comprehensive.”

Industry representatives have said the errors are often the result of incorrect information provided by lenders. Many complaints, they have said, come from people who are trying to remove legitimate negative information, such as payments that they actually missed.

Lenders rolled out sweeping deferment and forbearance programs for struggling borrowers in the pandemic’s early days. A provision in Congress’s first coronavirus stimulus package barred lenders that offered such options from recording the missed payments as late.

Errors can lower consumers’ credit scores and make it harder for them to get approved for financing or obtain affordable loans. Landlords also look at credit reports when reviewing rental applications.

The credit-reporting companies made “changes to their complaint response processes early in the crisis that predictably resulted in a significant decrease in responsiveness,” the letters say. That included using automated reviews to identify complaints suspected of having been submitted by a third party and using this as a reason to dismiss complaints, according to the letters.

The Consumer Financial Protection Bureau is separately investigating how Equifax, Experian and TransUnion handle consumer disputes, the Journal previously reported. 

Consumers submitted more than 700,000 complaints to the CFPB regarding Equifax, Experian and TransUnion between January 2020 and September 2021, according to the regulator. That is more than half of all the complaints the agency received during that stretch.

Credit-reporting companies are closing consumer complaints faster and are offering less relief, the CFPB said in a January report based on a review of its complaints database. The credit-reporting companies told the CFPB that they provided relief on less than 2% of complaints that consumers sent to the regulator in 2021 about incomplete or erroneous information on their credit reports. That was down from nearly 25% in 2019, the CFPB said.

Write to AnnaMaria Andriotis at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the May 26, 2022, print edition as ‘Lawmakers Set to Scrutinize Credit-Reporting Companies.’

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Quick Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment
buy kamagra buy kamagra online
Ads Blocker Image Powered by Code Help Pro

Ads Blocker Detected!!!

We have detected that you are using extensions to block ads. Please support us by disabling these ads blocker.