CFPB sues Experian over “sham investigations” into consumer complaints

Experian does not properly investigate consumer complaints of errors in credit reports, threatening their access to credit, employment and housing, the Consumer Financial Protection Bureau said Tuesday.

The agency is suing the consumer reporting conglomerate for violating the Fair Credit Reporting Act that requires Experian and other companies take steps to ensure the information they compile is accurate and to investigate consumer complaints. 

“When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law,” CFPB Director Rohit Chopra said in a statement. “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”

Specifically, the CFPB alleges that Experian is harming people by using faulty procedures in receiving information in handling consumer disputes. The company “routinely and uncritically accepts the original furnisher’s response to the disputed information, even when the response was improbable or illogical on its face, or when Experian has other information available that suggests the furnisher is unreliable.” Experian then fails to inform consumers of its findings, and instead offers confusing and incorrect information, CFPB stated.

Further, Experian reinserts inaccurate information into credit reports because it fails to match newly reported information with records of previously deleted information. Those who disputed the accuracy of an account and thought their report had been corrected instead see the same false information reappear without explanation, the agency found. 

The CFPB’s lawsuit, filed in a U.S. District Court in California, seeks to stop the company’s unlawful conduct and a civil money penalty, which would be paid into the agency’s victims relief fund.

Based in Dublin, Ireland, Experian employs 22,500 people in 32 countries. Its North American corporate headquarters is based in Costa Mesa, California. 

Experian did not immediately respond to requests for comment.