CFPB, citing ‘sham investigations,’ says Experian failed consumers who disputed credit report data; suit seeks redress, fines

A lawsuit alleging that consumer reporting agency Experian unlawfully failed to properly investigate consumers’ disputes over information in their credit reports was filed Tuesday by the Consumer Financial Protection Bureau (CFPB).

The CFPB said that Experian Information Solutions, Inc. – based in Costa Mesa, Calif., and a subsidiary of Experian plc, a global data broker and analytics company headquartered in Ireland – violated the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act (CFPA). It said the firm is harming consumers by, among other things, conducting “sham investigations” that fail to properly address consumer disputes; and improperly reinserting inaccurate information on consumer reports.

Among the specific allegations is that between January 2018 and October 2021, Experian “failed to forward more than 2 million disputes to furnishers within five business days” as required by the FCRA.

The bureau said Experian “fails consumers who dispute information in their consumer reports at every stage of the dispute process.”

The CFPB summarizes Experian’s FCRA violations as follows:

• failure to properly conduct reinvestigations of disputed information in consumer credit files;
• failure to delete inaccurate, incomplete, or unverified information in consumer credit files;
• failure to provide adequate written notice to consumers of the results of its reinvestigations;
• failure to prevent the improper reinsertion of previously deleted information from consumer credit files; and
• failure to follow reasonable procedures to assure maximum possible accuracy of the credit information it reports on consumers.

Experian violated the CFPA, the bureau adds, by committing unfair acts or practices, specifically:

• failing to convey consumers’ disputes to furnishers fully and accurately, and instead distorting, truncating, and mischaracterizing consumers’ disputes;
• relying excessively on furnishers to resolve disputes, routinely doing nothing more than sending the dispute to a furnisher and implementing the furnisher’s response, despite having evidence of that furnisher’s unreliability; and
• improperly reinserting tradelines into consumer credit reports due to its practice of failing to adequately match newly reported tradelines to tradelines that were previously deleted as a result of a dispute if the subsequent furnishing was from a new furnisher.

The complaint asks, among other things, that the court permanently enjoin Experian from committing future violations of the CFPA, FCRA, Regulation V, or any provision of “Federal consumer financial law”; order Experian to pay redress to harmed consumers (including restitution, damages, refunds, or other monetary relief); order it to disgorge any ill-gotten gains; impose civil money penalties; and award costs against the firm.

CFPB Sues Experian for Sham Investigations of Credit Report Errors