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Published on January 08, 2025
CFPB Sues Experian Accusing Credit Reporting Agency of 'Sham Investigations' in Consumer Dispute ProcessSource: Google Street View

The Consumer Financial Protection Bureau (CFPB) has initiated legal action against Experian, accusing the credit reporting giant of conducting so-called "sham investigations" when consumers dispute errors in their credit reports. The lawsuit, filed yesterday, claims that Experian failed to properly investigate these disputes, leading to inaccurate information that could negatively impact consumers' access to credit, jobs, and housing.

CFPB alleges Experian's processes were inadequately designed to check consumer disputes thoroughly. As a result, materials with disputable accuracy have remained on credit reports, potentially damaging the economic futures of affected individuals. "When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law," said CFPB Director Rohit Chopra, as per the Consumer Financial Protection Bureau.

Experian, headquartered in Costa Mesa, California, is no small-time operation; it is one of the largest credit reporting agencies in the nation, holding financial data on many American families. The company provides credit scores, reports, and monitoring services, which are used by various enterprises to evaluate individuals for creditworthiness and opportunities. Under the Fair Credit Reporting Act (FCRA), agencies like Experian are required to ensure their reports' accuracy and conduct due investigations into consumer disputes.

The CFPB asserts that Experian has multiple times violated the FCRA by failing to process and relay dispute details to the data furnishers accurately and often uncritically accepting the furnisher's explanation without proper scrutiny. This practice allegedly leads to incorrectly reinserting inaccurate information back into consumer reports, as Experian does not use adequate matching procedures that would prevent such errors. The CFPB's enforcement action aims to cease these alleged violations and compensate harmed consumers.

Consumers who have experienced similar issues with their financial records or credit reports can file complaints through the CFPB's website or at (855) 411-CFPB (2372). Additionally, whistleblowers with inside knowledge of violations of federal consumer financial laws can email [email protected].