Select Subcommittee Launches Investigation into Credit Reporting Failures During Pandemic
Washington, D.C. (May 25, 2022) – Today, Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent letters to the Chief Executive Officers of the three largest Nationwide Consumer Reporting Agencies (NCRAs)—Equifax, Experian, and TransUnion—requesting information on their decreased responsiveness to consumer complaints about credit reporting errors during the pandemic.
“The Select Subcommittee on the Coronavirus Crisis is committed to examining the economic impact of the pandemic on individuals, communities, and small businesses. Recent reports indicate that this impact included a significant decrease in [Nationwide Consumer Reporting Agencies’] responsiveness to consumer complaints and disputes regarding errors in consumer credit reports,” wrote Chairman Clyburn in the letters. “The Select Subcommittee seeks documents and information to investigate these reports and gain insight to help ensure that consumers are protected as our nation continues to recover from the crisis.”
The coronavirus pandemic created new avenues for introducing errors into credit reports. For example, lenders may have incorrectly reported some student loans and other loans with paused payments as late despite a CARES Act requirement that these loans be reported as current. The pandemic also coincided with an increase in identity theft, which can result in the introduction of erroneous information onto consumers’ credit reports. Inaccuracies in consumer credit reports can have serious, long-term consequences for consumers, such as blocking access to permanent housing or preventing small businesses from obtaining much-needed lines of credit.
Even as the risk of credit reporting inaccuracies increased during the pandemic—a risk that the NCRAs acknowledged by making reports available weekly rather than annually—the companies have reportedly become significantly less responsive to consumer complaints about potential inaccuracies. Certain changes made by NCRAs early in the pandemic, including the use of form letters to respond to complaints and diversion of complaints to a “dispute channel,” likely contributed to this decrease. Only 4.1% of complaints received relief, such as a correction of the reported error, in 2021, down from nearly 25% of complaints in 2019.
Given the risk of lasting harm to consumers from uncorrected inaccuracies, Chairman Clyburn requested documents and information from the NCRAs regarding their policies and efforts to address consumer complaints by June 8, 2022.
Click here to read the letter to Mark Begor, CEO of Equifax.
Click here to read the letter to Brian Cassin, CEO of Experian.
Click here to read the letter to Chris Cartwright, CEO of TransUnion.