Credit report errors are a nightmare for consumers — but they can also cause severe headaches for credit bureaus.
Mississippi’s attorney general this month announced Equifax, Experian and TransUnion must pay the state a total of $7.2 million and overhaul their business practices due to a rash of reporting errors and “deceptive marketing practices.” In addition, two of the agencies will provide state residents with unlimited free credit reports and one free FICO score per year for the next three years, starting in November.
The settlement is the result of a three-year investigation into the agencies’ practices stemming from consumer complaints about erroneous reporting of public information such as civil judgments and tax liens.
Attorney General Jim Hood’s office said in a news release the bureaus attributed public records to the wrong people and failed to update information about civil judgments being paid or dismissed. The agencies also lured unwitting consumers into a costly credit monitoring service with the promise of a free credit score or a $1 credit report, the state said.
In addition to its punishment, Equifax will launch a program to educate Mississippi consumers on credit and personal finance. The state attorney general’s office said the “Feel Good About Credit” program will “empower consumers to be their financial best” using emojis and an interactive quiz. TransUnion will promote the program via print, digital and social media advertising.
The three major bureaus have long come under scrutiny for persistent credit reporting errors, which can have a severe impact on a consumer’s ability to get a loan, rent an apartment or even secure a job offer.
The Consumer Financial Protection Bureau said in a May report that 77 percent of all consumer complaints it had received about credit bureaus were related to incorrect information on credit reports. Consumers have continued to experience long, drawn-out fights over credit report errors decades after passage of the Fair Credit Reporting Act in 1970.
Disputing and correcting a credit report error typically involves writing a letter to the bureau that made the error and providing evidence to support your case. You can take a credit bureau to court if it continues to verify the bad information — but that may not be an option if you dispute the error online.
It is unclear whether all of the issues that came to light in Mississippi exist in other states. In any case, Attorney General Hood’s comments on the matter underscore the fact that consumers still face an uphill battle when trying to rectify errors reported by the three major credit bureaus.
“These corporations were too busy making money and listing debt that they didn’t bother to take the time to delete errors or verify whether the debts were correct,” Hood said in a statement. “Even worse, consumers had to fight tooth and nail to get these significant errors corrected.”
The good news for Mississippians is that they will have no trouble keeping up to date on their credit reports — and any new errors that should arise — for quite some time.