FTC Completes Final Credit Bureau Error Analysis

FTC Completes Final Credit Bureau Error Analysis

Acceptance marks displayed on top left of this sign (Photo credit: Wikipedia)FTC Completes Final Credit Bureau Error Analysis

FTC Completes Final Credit Bureau Error Analysis

FTC Completes Final Credit Bureau Analysis was welcome news to those of us who have long been skeptical of the wildly differing claims made about this issue.  Previous claims of rates of credit bureau errors have come from groups with an interest in the outcome.  These claims of error have ranged from 1 percent to 70 percent.  There are hidden errors that this study would not uncover.  Unregistered and unlicensed debt collectors are not immediately obvious.

In response to the absence of any real evidence on which to proceed Congress ordered the Consumer Financial Protection Bureau to commission a scientifically valid study and report back with its findings.  The CFPB examined 3,000 reports of 1001 consumers and issued its findings.  Drum roll please…and the findings are:

 Credit Reports 21 percent Inaccurate:  FTC Completes Final Credit Bureau Analysis

21 percent of consumers had inaccuracies which had an impact ranging from modest to none.  5.2 percent had errors on one of the 3 reports that could be expected to result in less than favorable terms for loans for mortgages, autos or insurance.  These errors could even cost a consumer a job or an apartment.  5.2 percent may not sound like much unless, of course, it is you. 5.2 percent means 10 Million consumers. Credit cards represent more than half of the data contained in these reports.  It is particularly important for consumers to strictly avoid late credit card payments.  If all you can make is the minimum payment at least do that.

FTC Completes Final Credit Bureau Analysis:  The Real Scandal

The nightmare many consumers experience trying to correct the errors is where the real scandal lies.  Carefully worded complaints by consumers are converted into 2 or 3 digit codes which are returned to creditors for “investigation.”  Federal Courts have consistently held that agency’s complaint investigations must consist of responsibility for  “more than just parroting information received from other sources.”  There needs to be a new set of rules mandating details and points that must be investigated when a consumer files a complaint.  Many consumers have spent years of their lives wasting time and opportunities trying to shift the burden of proof back to the one who made the claim.  Isn’t that where the burden of proof should originally be?  Laws regarding notice to the consumer before the filing of the claim of delinquency also need to be strengthened.

FTC Completes Final Credit Bureau Analysis:  Concluding Thoughts

Another finding by the CFPB is that additional training is needed by lenders to improve the quality of the data submitted.  I have no doubt that work along those lines is being done at this time and will be the subject of future reports.  Only 1 in 5 consumers actually take advantage of their right to a free annual credit report.  The person who sleeps on the rights they have has little cause for complaint about the mistakes of others.  Diligence on the part of the consumer is a big part of the equation as well.

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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