Credit Bureau Errors and The Consumer Bureau
Credit Bureau Errors
The regulators at the Consumer Financial Protection Bureau are taking direct aim at Equifax, Experian, Trans Union and smaller credit reporting agencies to determine whether their responses to consumer complaints of errors are fair and reasonable. They will focus on the tens of thousands of complaints by consumers who say it is hard to get credit bureau errors corrected.
“The public should not be burdened by unreasonably laborious processes to get errors removed from their files.” says CFPB director Richard Cordray. Mr. Cordray also remarked…”score keeping by credit bureaus plays such a large role in American’s financial lives, it requires scrutiny.” He said the agency’s oversight will extend to niche companies that “focus on payday loans or checking accounts, as well as resellers of credit reports and those that analyze credit information.”
Credit Bureau Errors and The Fair Credit and Reporting Act
I have long predicted that the CFPB would clarify what the Fair Credit Reporting Act requires of credit bureaus. Detailed legal requirements are not fleshed out in the law as it currently stands. In short there will now be defined procedures and standards for reasonableness.
The announcement wasn’t a total surprise. It has been long overdue that the situation would be addressed by credit reporting agency overseers. The CFPB had hinted earlier this year that it was considering supervising the industry. More than 200 million Americans have information on file with the 3 major credit reporting agencies. Information on payment history towards mortgages, auto loans and credit cards as well as collection activities are reported in great detail. Both negative and positive information is analyzed to determine the level of risk you represent to a creditor as a borrower. Credit Bureau errors can have a devastating effect on consumer’s financial lives.
Proving Entries are Credit Bureau Errors
People that are otherwise fair minded tend to forget that these claims of Debt Collection Agencies as well as others are mere allegations of debt. They are entered without any judgment on the merits of the claim. The burden of proof is shifted to the alleged debtor instead of remaining on the claimant where it belongs. Disproving credit bureau errors always seems to be an uphill battle. Now that there is a process for appealing to the CFPB from an adverse finding by a credit reporting agency on credit bureau errors there is a lot more fairness in the system.
The new rule takes effect on September 30, 2012.