Mississippi Sues Credit Bureau Experian over Extensive Lapses

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By Consumers Union on Monday, June 16th, 2014

The credit bureau Experian is under fire for its credit reporting mistakes that harm consumers’ abilities to obtain credit and employment.

The state of Mississippi has sued Experian because of repeated, serious credit reporting errors that can be very difficult to fix. In addition to pointing out concerns over the ways in which Experian puts together credit reports, Mississippi accused Experian of failing to set up a reliable system for consumers to correct these errors – and that it even tried to sell expensive credit monitoring products to consumers who called about their errors. Mississippi’s complaint revealed that these errors can keep consumers from getting loans, and from passing background checks and security clearances for jobs.

Recent research has revealed the extent of credit reporting errors among the three major credit bureaus – Experian, Equifax, and TransUnion. A Federal Trade Commission (FTC) report released in December 2012 showed that at least 5 percent of consumers – or an estimated 10 million consumers — had an error on a credit report that might cause them to pay more for credit.

Experian, along with the other two big credit bureaus, is also under investigation by attorneys general in other states, including Ohio. Ohio’s Attorney General has previously chastised the credit bureaus in a 60 Minutes report for their credit reporting mistakes and inadequate dispute procedures

Consumers Union has long criticized the credit bureaus for their credit reporting mistakes. In April, we released a policy brief that outlined the extent of credit reporting errors and the difficulties consumers had in obtaining reliable credit scores. It also featured consumer stories that showed how credit reporting mistakes compromised consumers’ efforts to successfully apply for loans and jobs and to get a fair rate for insurance. For example, Judy, from New York, New York shared with Consumers Union:

“Based upon erroneous information [on my credit report] and assumptions made hastily, my car insurance company with which I had worked for several decades doubled my insurance rates overnight. I have not been able to get copies of my credit scores from the three credit companies or to get them to remove the erroneous information to date.”

We hope that Mississippi’s action will bring more attention to credit reporting legislation pending in Congress, the Stop Errors in Credit Use and Reporting (SECURE) Act. The SECURE Act would require credit bureaus to follow stricter procedures to ensure credit reports are accurate. The bill also gives consumers the right to a reliable credit score at no cost with each of their free annual credit reports.

Have you been harmed by errors on your credit report? You can help us bring attention to this important issue and build support for reform by sharing your story!

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