New NCLC Report “Automated Injustice” Discusses Credit Bureaus’ Failure to Investigate Consumer Disputes

January 27, 2009

The National Consumer Law Center (NCLC) has published a new report revealing industry-wide problems with how credit bureaus handle consumer disputes.

The findings of the report are unlikely to surprise any consumer who has tried to dispute an error on his or her credit report.

Bureau representatives have repeatedly told our office that a dispute only requires them to compare the information they report to the information the creditor provided. If the information matches, the investigation is deemed complete. But, courts have repeatedly rejected this interpretation of bureaus’ investigation duties under the Fair Credit Reporting Act (FCRA.)

And, in the course of handling consumer disputes, our office has never seen a single example of a bureau actually forwarding a consumer’s dispute letter and supporting documentation to a creditor / subscriber for investigation. Yet, this is one of the tasks bureaus are charged with under the Fair Credit Reporting Act. The NCLC report discusses this industry failure as well.

The report is linked here:

Automated Injustice: How a Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors in Their Credit Reports, Jan. 27, 2009