DS News

DS News Jan 2023

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Page 61 of 83

60 60 60 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal CFPB ISSUES LATEST INSIGHTS REPORT e Consumer Financial Protection Bureau (CFPB) has released an annual report that details improvements and deficiencies in the nationwide consumer reporting companies' responses to consumer complaints transmitted by the CFPB. e report includes considerations for the nationwide consumer reporting com- panies to improve compliance with consumer financial protection laws and, more broadly, to serve consumers better. "TransUnion, Equifax, and Experian routinely top the list of complaints submitted by consumers," CFPB Director Rohit Chopra said. "We will be exploring new rules to ensure that they are following the law, rather than cutting corners to fuel their profit model." e Fair Credit Reporting Act requires the CFPB to submit an annual report about complaints submitted by consumers regarding the nationwide consumer reporting companies: Equifax, Experian, and TransUnion. Today's report is based on the 488,000 consumer complaints the CFPB transmitted to Equifax, Experian, and TransUnion from October 2021 through September 2022. e findings follow last year's report that detailed failures by the nationwide companies when responding to consumer complaints submitted to the CFPB. Equifax, Experian, and TransUnion have since acted to remedy some of the issues identified in last year's report. Specifically, the CFPB found Equifax, Experian, and TransUnion have: • Changed how they respond to complaints: Equifax, Experian, and TransUnion's use of problematic response types described in last year's report has declined. Most complaints now receive more substantive responses. • Provided more tailored complaint responses: Across all three companies, most responses now describe the outcomes of consumers' complaints. In September 2022, the nation- wide companies provided a tailored response to more than 50% of complaints that were closed with an explanation or relief. • Reported greater rates of relief in response to complaints: In 2022, TransUnion reported providing relief in most complaints. Expe- rian reported providing relief in nearly half of complaints. Equifax reported that it did not provide relief, but its written complaint responses suggest that its rates of relief are comparable to the other two companies. e CFPB has highlighted other consumer reporting problems and has reminded consumer reporting companies of their obligations to consumers under the Fair Credit Reporting Act. For example, an earlier report revealed how nationwide consumer reporting companies had often allowed their processes to be used to coerce individuals to pay medical bills they may not even owe. e CFPB also issued straight- forward guidance on permissible purposes for accessing consumer reports, identifying and eliminating false and junk data, and resolving consumer disputes. Additionally, the CFPB has taken action against consumer reporting companies when they have broken the law, as well as affirmed the ability of states to police credit reporting markets. e CFPB expects the three nationwide consumer reporting companies to continue im- proving how they serve consumers. To that end, the CFPB recommends that Equifax, Experian, and TransUnion: • Consider consumer burden when im- plementing automated processes: When companies consider introducing automated processes that will affect their customers, par- ticularly those that relate to a legal right, they should consider the consumer burden, espe- cially whether a change will require consumers to do more work to exercise their legal rights. • Recognize that technology is also improv- ing for consumers: Advances in communi- cations technologies mean consumers do not necessarily need to write complaints on their own. Instead, communications technologies may ease the writing burden. Such innovations, including ones that can generate letters for consumers, may create similar-sounding com- plaints that are, in fact, from unique individuals with independent concerns. e assumption that similar-sounding letters are from third parties will increasingly be wrong. • Consider how to transition the market from control and surveillance to consumer participation: One potential reason there are so many reported inaccuracies in consumer reporting data is that consumers are several de- grees removed from their own data. Enabling increased consumer participation on the data side of consumer reporting has the potential to create a fairer market with added benefits for consumers, consumer reporting companies, and lenders.

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