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From Banking and Finance Law Daily, May 24, 2016

CFPB complaint snapshot: Credit reporting troubles continue to plague consumers

By J. Preston Carter, J.D., LL.M.

The Consumer Financial Protection Bureau’s May 2016 complaint snapshot highlights continuing consumer complaints about incorrect information on their credit reports as well as difficulty having errors resolved. This month’s report also highlights trends seen in complaints coming from New Mexico.

“Credit reports are the foundation of consumers’ financial lives” said CFPB Director Richard Cordray. “Consumers continue to express their frustration about inaccurate information on their credit reports and difficulty in getting these errors fixed. We will continue to work to ensure that credit report disputes are investigated, errors are fixed, and consumers are treated fairly.”

Product spotlight on credit reporting. As of May 1, 2016, the CFPB has received approximately 143,700 credit reporting complaints from consumers. Over three-quarters have been related to incorrect information appearing on reports. Consumers frequently complained about a debt collection item that has been paid but appears as an unpaid debt on the report, a debt that is not recognized by the consumer, or a debt that is no longer due because it has passed the point of being enforceable in court.

Consumers also report difficulties disputing inaccuracies on their credit report. They experience long delays trying to speak to a consumer reporting agency representative or negative customer service experiences once are able to talk to a representative, said the report.

Most of the credit reporting complaints involve the three nationwide companies: Equifax, Experian, and Transunion. More than 2,000 complaints related to consumer reporting companies that specialize in providing reports in areas including background and employment screening, checking account screening, rental screening, and insurance screening.

National complaints. The report also provides an overview of national complaints. As of May 1, 2016, the CFPB has handled 882,800 complaints nationally. Statistics highlighted in the snapshot include:

  • complaint volume: for the month of April, consumers submitted 23,870 complaints, of which 7,300 regarded debt collection;
  • credit reporting accounted for 4,587 complaints, while mortgages accounted for 4,347 complaints;
  • complaints submitted relating to student loans rose 48 percent between February and April, with 992 complaints received, compared to 669 complaints received during the same time period in 2015; and
  • New Mexico, Minnesota, and Indiana experienced the greatest year-to-year complaint volume increases from the February to April 2016 period versus the same time period in 2015.

Spotlight on New Mexico. As of May 1, 2016, consumers in New Mexico have submitted 4,700 of the 882,800 complaints the CFPB has handled. According to the report, consumer complaints from New Mexico were more likely to be about debt collection than consumer complaints nationally. Debt collection complaints accounted for 27 percent of all complaints submitted to the CFPB nationally, but they accounted for 31 percent of complaints submitted from consumers in New Mexico.

Mortgage complaints from New Mexico were lower than the national average: 19 percent of all complaints as compared to 26 percent of all complaints nationally.

Finally, the three most complained-about companies for New Mexico consumers were TransUnion, Experian, and Equifax.

Companies: Experian; Equifax; Trans Union

MainStory: TopStory CFPB ConsumerCredit DebtCollection IndianaNews MinnesotaNews Mortgages DebtCollection FairCreditReporting Loans NewMexicoNews

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