CFPB sues Experian over “sham investigations” into consumer disputes

Editorial

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The CFPB alleges that Experian does not take sufficient steps to intake, process, investigate, and notify consumers about consumer disputes, resulting in the inclusion of incorrect information on credit reports.

“When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law,” says CFPB director Rohit Chopra. “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”

The CFPB says Experian “routinely and uncritically accepts the original furnisher’s response to the disputed information, even when that response was improbable or illogical on its face, or when Experian has other information available that suggests the furnisher is unreliable”.

A furnisher is an institution that reports consumer credit information to one or more of the major credit bureaus.

The watchdog further alleges that at the conclusion of the investigation, Experian sends consumers notices that fail to inform them of the investigation results, and instead provides information that is confusing, ambiguous, incorrect, or internally inconsistent.

Moreover, the firm is accused of failing to implement basic matching tools that prevent or greatly reduce the likelihood of reinsertion by a new furnisher of a previously deleted tradeline. As a result, consumers who have disputed the accuracy of an account and thought that their consumer report had been corrected, instead see the same inaccurate information reappear on their consumer report without explanation under the name of a new furnisher.

The CFPB’s lawsuit seeks to stop the company’s conduct, to provide redress for harmed consumers, and the imposition of a civil money penalty.