Ohio newspaper The Columbus Dispatch has just published, in a four-day series, the results of its year-long investigation of complaints against the three major credit-reporting agencies in the US – Equifax, Experian and TransUnion – for violations of the Fair Credit Reporting Act (FCRA).
The study, which is among the most comprehensive reviews ever conducted of complaints against credit-reporting agencies, collected and analyzed nearly 30,000 consumer complaints filed with the Federal Trade Commission (FTC) and attorneys general in 24 states.
Some of what the Dispatch found:
- More than 5 percent complained to the FTC and more than 40 percent to the attorneys general that their reports had basic personal information listed incorrectly: names, Social Security numbers, addresses and birth dates.
- An Ohio man said his report identified him as having been a police officer since 1923. He was born in 1968.
- A woman in her 60s said that her credit report listed her as 12 years old.
- More than 5 percent complained to the FTC that their reports contained an account that did not belong to them.
- A woman in Georgia complained about a medical-collection account on her report. It was for treating prostate cancer.
- Nearly a quarter of the 1,094 people who said they found accounts that did not belong to them on their credit reports identified the mistaken debts as a judgment, tax lien, foreclosure or bankruptcy.
- One homeowner said his house had been paid off, but it showed on his credit report as a foreclosure.
- At least 80 consumers discovered bankruptcies that did not belong to them. A single person in Florida found seven.
The Dispatch noted that, while various studies have attempted to document the accuracy rate of credit reports, estimates of the error rate range from less than one percent from a study funded by the credit reporting industry to a high of 25 percent from a consumer advocate study. But some might say that even a one percent error rate is troubling, since it reflects errors on the reports of approximately 2 million people in the US.
Perhaps more disturbing than the errors themselves is that more than half of all who filed complaints with the FTC said that despite their best efforts, they could not persuade the three major credit-reporting agencies to fix the problems. The complaints document the inability of consumers to correct errors that range from minor to financially devastating. Consumers said the agencies can't (or won't) even correct the most obvious mistakes: That's not my birth date. That's not my name. I'm not dead.
Nearly 15 percent of the 6,035 consumers who complained to the federal government said the mistakes involved court records. Court records contain the most damaging information – judgments, tax liens, foreclosures and bankruptcies – likely to end up on a credit report. A man in Texas said he couldn't persuade the credit-reporting agencies to remove a tax lien that did not belong to him. As a result, he had to pay an extra $4,000 in fees when he bought his house.
In the case of court records, Experian, Equifax, and TransUnion, the three major credit-reporting agencies in the US, hire vendors to gather information ftom the courts, then the credit reporting agencies themselves maintain and maintain and disseminate it. The specifics of how that process works, though, are largely unknown by consumer advocates and industry observers. When errors are found, not even judges or other court officials have standing to correct the problems -- credit-reporting agencies do not accept their word that a mistake was made.
Part of the problem may be created by the court records themselves. To shield against identity theft, court documents accessible to the public are stripped of Social Security Numbers and, in some states, birth dates. That leaves very little information with which to match court cases to consumers, mainly names and addresses. "This is how you introduce errors," said Chi Chi Wu, staff attorney at the National Consumer Law Center, which advocates for consumer rights and protections. "Name-only matches should be prohibited."
Civil and criminal records change constantly. Cases are dismissed or settled, but those changes aren't always reflected in credit reports. And that doesn't account for how judgments are assigned to innocent bystanders' credit reports. Given their critical impact on credit reports, Wu says "There certainly should be a higher standard" for reporting court records.
Readers, please, look at your credit reports regularly. Go to the FTC website for information on how to get one free copy of your credit reports per year. Once you have a copy, be sure to look at the public filings section of the reports for any judgments that look unfamiliar to you. If you find any, call The Langel Firm or another consumer rights law firm for help -- in some instances we can help you vacate those judgments and get them removed from your credit reports.