Consumer Law

New Report on Credit Bureaus' Electronic Dispute System & How it Frustrates Consumers

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Inaccuracies plague the credit reporting system. The FCRA established a process to enable consumers to dispute the inaccuracies and force the credit bureaus and companies that provide the data to investigate the disputes and make corrections. A new report from the National Consumer Law Center shows that the system is a travesty.

The three major credit bureaus conduct investigations in a perfunctory manner. The bureaus translate consumers' detailed dispute letters into two or three digit codes and send the codes to the companies that furnished the information. The bureaus fail to send supporting documentation to the companies in violation of the FCRA. The bureaus spend only trivial resources on the process. Trans Union and Equifax have established dispute centers in India, the Phillipines, and elsewhere.

The report, which is based largely on depositions of credit bureau employees, calls for amendments to the FCRA and my regulation by the FTC.

Full post as published by California Credit Law Blog on January 28, 2009 (boomark / email).