The Consumer Financial Protection Bureau (CFPB) is no stranger to taking action against companies that violate consumer protection laws. Recently, the CFPB has filed lawsuits against two of the largest credit bureaus in the U.S. — Equifax and Experian. This legal action addresses serious concerns over credit report inaccuracies, data security breaches, and misleading advertising of credit scores. This puts their compliance with federal regulations into question.
If you’ve ever checked your credit report, there’s a good chance that you’ve interacted with these agencies. Equifax, Experian, and TransUnion are the three major credit bureaus that compile credit reports used by lenders, insurers, and other entities to assess a consumer’s creditworthiness. When these bureaus fail to meet consumer protection standards, it’s a big deal — and that’s exactly what the CFPB alleges in their lawsuits.
In this blog, we’ll dive into what’s happening with the CFPB lawsuits, the allegations against Equifax and Experian, and how this legal action could impact you as a consumer.
Why Is the CFPB Suing Equifax and Experian?
The CFPB’s lawsuits claim that both Equifax and Experian are violating consumer rights by failing to fix errors on credit reports in a timely manner, misleading consumers about free credit scores, and not providing consumers with easy access to their free credit reports. The suits also highlight data protection failures, which can leave sensitive personal information exposed.
Here’s a Breakdown of the Allegations against Experian:
The Bureau alleges that Experian violated FCRA by:
- Failing to delete inaccurate, incomplete, or unverified information in consumer credit files
- Failing to provide adequate written notice to consumers of the results of its reinvestigations
- Failing to prevent the improper reinsertion of previously deleted information from consumer credit files
- Failing to follow reasonable procedures to assure maximum possible accuracy of the credit information Experian reports on consumers
The cfpb also claims that Experian committed unfair acts or practices by (1) failing to convey consumers’ disputes to furnishers fully and accurately, and (2) relying excessively on furnishers to resolve disputes, routinely doing nothing more than sending the dispute to a furnisher and implementing the furnisher’s response, despite having evidence of that furnisher’s unreliability.
This basically means that when people sent Experian a dispute, no real investigation was done. Leaving people unable to use their credit due to errors on their reports.
Here’s a Breakdown of the Allegations against Equifax:
Similar to Experian, the cfpb alleges all the same reasons EXCEPT that Equifax’s situation is a little worse. In conducting an investigation, the cfpb found that Equifax;
- Failing to block reporting of information consumers identified as resulting from identity theft and to provide appropriate notice when such blocks were declined or rescinded
- Using ineffective systems, flawed processes, and excessive deference to furnishers to resolve consumer disputes and failing to adequately inform consumers of the results of reinvestigations
- Selling inaccurate consumer credit scores and credit attributes after it introduced “test code” into a production environment in a scoring model server
Here’s How the Lawsuit May Affect You:
Potential for More Accurate Credit Reports: If the CFPB wins the lawsuits, it could result in better practices around credit report accuracy. This means that when consumers dispute an error, it could be resolved more quickly and accurately.
Better Consumer Rights Protection: The lawsuits could result in stronger protections for consumers when it comes to accessing their free credit reports and credit scores. This would allow consumers to better monitor their credit and avoid being misled by inaccurate or deceptive offers.
Stronger Security Standards: If the allegations about data security violations are proven, the credit bureaus may be forced to invest more in protecting your personal information. This could reduce the risk of identity theft and fraud.
How You Can Start Protect Yourself
- Monitor Your Credit Reports: Stay on top of any errors or discrepancies by checking your credit reports regularly with credit monitoring services such as; Identityiq, Myscoreiq, etc. And grabbing a free detailed report from AnnualCreditReport.com
- Dispute Errors: If you find inaccurate information, dispute it right away to ensure timely corrections. You can have an agency like WhyConsumerCounseling LLC help you dispute these errors.
- Beware of “Free” Credit Score Offers: Be cautious of services that claim to offer “free” credit scores without clear terms.
- Protect Your Personal Data: Take steps to safeguard your personal and financial information.
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Conclusion
The CFPB lawsuits against Equifax and Experian could lead to significant changes in how these credit bureaus operate, making it easier for consumers to manage their credit reports and protect their personal data. Stay informed and take proactive steps to ensure your financial security.
By staying aware of your rights and regularly checking your credit, you can protect yourself from errors, fraud, and potential damage to your credit score.
This legal battle may be just the beginning of stronger consumer protection in the world of credit reporting, but it’s essential to act now to safeguard your financial future.
If you need help with your credit, book a free consultation or email us at info@whyconsumercounseling.org