New Report on Credit Bureaus' Electronic Dispute System & How it Frustrates Consumers
Inaccuracies plague the credit reporting system. The FCRA established a process to enable consumers to dispute the inaccuracies and force the credit bureaus and companies that provide the data to investigate the disputes and make corrections. A new report from the National Consumer Law Center shows that the system is a travesty.
The three major credit bureaus conduct investigations in a perfunctory manner. The bureaus translate consumers' detailed dispute letters into two or three digit codes and send the codes to the companies that furnished the information. The bureaus fail to send supporting documentation to the companies in violation of the FCRA. The bureaus spend only trivial resources on the process. Trans Union and Equifax have established dispute centers in India, the Philippines, and elsewhere.
On February 8, 2009, the New York Times picked up on the NCLC report in an article, Faulting Credit Firms on Fixing Errors. SmartMoney Magazine has its own story on this same topic in its March 2009 issue, Why the Credit Bureaus Can't Get it Right.
The report, which is based largely on depositions of credit bureau employees, calls for amendments to the FCRA and more regulation by the FTC.
