31-state, $6 million agreement with Equifax, Experian, and TransUnion
(DES MOINES, Iowa) The nation’s three major credit reporting agencies must improve credit reporting accuracy and enhance consumer protections through a $6 million agreement with 31 state attorneys general, including Attorney General Tom Miller.
Under the settlement with Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC, the credit reporting agencies must make it easier for consumers to correct errors on their credit reports.
“We’ve had many complaints over the years about credit reporting agencies not fixing their own mistakes on peoples’ credit reports, and it has been difficult, and in some cases impossible, for consumers to push them to correct it,” Miller said. “Credit reports are vital to consumers. They can affect peoples’ abilities to secure jobs, homes and vehicles. These reports must be accurate.”
The agencies must also reform other business practices. Through the agreement, the agencies must increase monitoring of data furnishers, require additional information from furnishers of certain types of data, limit direct-to-consumer marketing, limit certain information that can be added to a credit report, provide additional consumer education, and comply with state and federal laws, including the Fair Credit Reporting Act.
Key provisions of the settlement include:
- Added protections for consumers who dispute credit reporting information:
- The credit reporting agencies must implement an escalated process for handling complicated disputes, such as those involving identity theft, fraud, or mixed files — where one consumer’s information is mixed with another’s.
- Each credit reporting agency must notify the other agencies if it finds that one consumer’s information has been mixed with another’s.
- The credit reporting agencies must send a consumer’s supporting documents to the data furnisher. (The credit reporting agencies implemented this change after the attorneys general initiated their investigation and raised the concern that the pertinent complaint documents were not being sent to the furnishers.)
- Consumers may obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute. Consumers can obtain annual credit reports for free from each of the three agencies at www.annualcreditreport.com.
- Limits to certain information that can be added to a consumer’s credit report:
- The credit reporting agencies are generally prohibited from adding information about fines and tickets to credit reports.
- The credit reporting agencies cannot place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency, which gives consumers time to work out issues with their insurance companies.
- The credit reporting agencies must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.
- Higher standards for data furnishers:
- The credit reporting agencies must maintain information about problem data furnishers and provide a list of those furnishers to the states upon request.
- The credit reporting agencies and data furnishers must use a better, more detailed system to share data.
- Limits to direct-to-consumer marketing:
- The credit reporting agencies cannot market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.
- The credit reporting agencies must tell consumers that purchasing a product is not a requirement for disputing information on their credits reports.
- Additional consumer education:
- The credit reporting agencies must tell consumers how they can further dispute the outcome of an investigation into a dispute, such as by filing a complaint with other agencies.
- Each credit reporting agency must provide a link to its online dispute website on the website www.annualcreditreport.com, and the credit reporting agency’s dispute website must be free of ads and any marketing offers.
Under the agreement, the agencies will pay more than $106,000 to a State of Iowa consumer education and litigation fund.
The credit reporting agencies will implement the changes in three phases to allow them to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date.