CU Urges Congress to Strengthen the Federal Credit Reporting Law
For immediate release
July 24, 2003
Janell Mayo Duncan or Liz Rose
Washington, DC — Today, the House Financial Services Committee will mark up H.R. 2622, the “Fair and Accurate Credit Transactions Act of 2003.” The legislation would amend the Fair Credit Reporting Act, a critically important consumer protection law that fails to adequately protect consumers from identity theft and inaccurate credit-report information that can cost consumers thousands of dollars in higher loan rates.
According to a recent study, identity theft is an underreported crime, affecting an estimated 7 million Americans last year alone. Many practices engaged in by credit card companies and credit reporting agencies are responsible for the skyrocketing number of identity theft cases, including the failure to carefully verify the identity of a credit applicant, the granting of ‘”quick credit” to imposters, and inadequate fraud detection by credit reporting agencies.
“Too many consumers are hurt by inaccurate information submitted about them by creditors. These errors can jeopardize the ability of consumers who have diligently paid their bills on time to obtain credit at a rate they deserve,” said Janell Mayo Duncan, Legislative and Regulatory Counsel for Consumers Union. “H.R. 2622 must be improved to better ensure that creditors submit accurate consumer credit information to credit bureaus. In addition, it must ensure that if there are mistakes on a consumer’s credit report, creditors have to act quickly to correct them,” she added.
The federal Fair Credit Reporting Act must be strengthened to:
— Increase the accountability of creditors for the information they provide to credit reporting agencies
— Keep credit card companies from hiking up consumers’ rates on unfair or unrelated bases – as the amendment sponsored by Reps. Sanders, Bachus, and Maloney would do
— Remove the state preemption language and allow states to act to pass stronger laws to protects their residents
— Provide an expedited dispute resolution procedure, especially when consumers must correct their credit reports quickly — for example, when seeking a home mortgage
— Allow consumers to obtain the actual copy of any credit report a creditor uses to deny credit or to lend at usurious rates
— Close loopholes that allow medical information to appear on a consumer’s credit report, and that enable the sharing of medical information between companies and their affiliates
“Without amendment making these changes to the bill, we cannot support H.R. 2622. Consumers will continue to fall victim to identity thieves. Consumers will also continue to get ripped off by paying higher loan rates due to errors on their credit reports that they cannot quickly and easily fix. H.R. 2622 is good for the financial services companies, but it is bad for consumers,” Duncan concluded.
Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer.