Credit Bureaus Failing to Respond to Consumer Complaints, Federal Agency Says

May be in violation of the Fair Credit Reporting Act

The three major U.S. credit bureaus — Experian, Equifax, and TransUnion — have routinely failed to properly address consumer complaints about errors in their credit reports, according to the Consumer Financial Protection Bureau (CFPB).

Key Takeaways

  • The three major credit bureaus, Experian, Equifax, and TransUnion, often fail to properly respond to consumers who have found suspected errors on their credit reports, a new analysis from the Consumer Financial Protection Bureau (CFPB) says.
  • These deficiencies suggest that the bureaus are not meeting their obligations under the Fair Credit Reporting Act.
  • The CFPB maintains that a lack of real competition among the three private companies gives them little incentive to treat consumers fairly.

An Avalanche of Consumer Complaints

By law, consumers can submit complaints about incomplete or inaccurate credit reports to the CFPB. According to the agency, it received more than 700,000 such complaints regarding Equifax, Experian, and TransUnion between January 2020 and September 2021. That represented more than 50% of all complaints received by the agency during that period.

The Fair Credit Reporting Act requires that the three bureaus conduct a review of those complaints where "the consumer appears to have previously attempted to fix the problem with the company." The bureau must then report back to the CFPB on what its review determined and what actions it has taken as a result.

However, the CFPB report, which was released on Jan. 5, maintains that:

  • Of the three companies, Equifax most often promised to open investigations of their disputes and send their findings to consumers at later dates. However, it failed to share the outcomes of its investigations with the CFPB.
  • TransUnion made similar promises and also often failed to meet its obligations to share investigation outcomes with the CFPB. In addition, TransUnion often failed to provide a response in instances where it believed that third parties submitted the complaints, the CFPB reports. However, the CFPB says that, "consumers can authorize third-party representatives to submit complaints on their behalf."
  • Like TransUnion, Experian often took no action in instances where it believed that a third party submitted the complaint, although it did provide substantive responses to other complaints.
  • All three bureaus relied heavily on automated "templates" to respond to complaints instead of providing a meaningful, personalized response to the consumer. That's despite having up to 60 calendar days to reply.

In its report, the CFPB alleges that the credit reporting agencies have failed to meet their statutory obligations under FCRA.

Credit report errors — and the difficulty of getting them corrected — can have a serious impact on consumers. The CFPB notes that, "lenders rely on this information to decide whether to approve loans and on what terms. Consumer reporting also informs decisions about employment, insurance, housing, and even essential utilities. For consumers, inaccuracies on credit reports drive up the cost of credit and severely limit opportunities, such as starting a small business or buying a new home."

The CFPB's director, Rohit Chopra, attributes the three bureaus' deficiencies to a lack of competition in the credit reporting industry. "America's credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors," he said in a press release. "Today's report is further evidence of the serious harms stemming from their faulty financial surveillance business model."

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  1. Consumer Financial Protection Bureau. "CFPB Releases Report Detailing Consumer Complaint ResponseDeficiencies of the Big Three Credit Bureaus."

  2. Consumer Financial Protection Bureau. "Annual Report of Consumer and Credit Reporting Complaints: An Analysis of Complaint Responses by Equifax, Experian, TransUnion."