Consumer News

AG Schmidt: Credit reporting agencies required to make reforms

Release Date: May 20, 2015

TOPEKA – (May 20, 2015) – The three national credit reporting agencies are required to make major reforms to their business practices affecting consumers’ credit scores under a settlement reached today, Kansas Attorney General Derek Schmidt announced.

Schmidt, along with the attorneys general of 30 other states, reached the agreement with Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC. The settlement was the result of a multistate investigation into consumer disputes about credit report errors, accuracy in consumer credit reports, and the marketing of credit monitoring products to consumers who called the credit reporting agencies to dispute information on their credit report.

“The data supplied in consumers’ credit reports affects virtually every aspect of their financial lives,” Schmidt said. “Over the years, many consumers have lodged complaints regarding errors on their credit reports and the hassle involved in getting these errors corrected. Today’s settlement is a big win for consumers, allowing them much greater control in resolving disputed information on their credit reports.”

Under the settlement, the credit reporting agencies have agreed to increase monitoring of data furnishers, to require additional information from furnishers of certain types of data, to limit direct-to-consumer marketing, to provide greater protections for consumers who dispute information on their credit reports, to limit certain information that can be added to a credit report, to provide additional consumer education, and to comply with state and federal laws, including the Fair Credit Reporting Act.

Key provisions of the settlement include:

  • Credit reporting agencies and organizations that provide them with credit reporting information (i.e. banks and credit card companies) are required to develop better systems for sharing data to improve accuracy.
  • Credit reporting agencies are required to implement a better process for handling complicated disputed credit reporting information, such as those involving identity theft, fraud or mixed files – where one consumer’s data is mixed with another’s.
  • Consumers who dispute information on their credit reports are entitled to one additional free credit report within a 12-month period if a change is made as a result of their dispute.
  • Credit reporting agencies are not allowed to market additional services to consumers who call to dispute information on their credit reports until the dispute resolution portion of the call has ended.
  • Credit reporting agencies must inform consumers that purchasing additional services is not required to dispute information on their credit reports.

In addition to Kansas, other states participating in the settlement included Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.

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