Consumer Finance Insights
March 9, 2015

Credit Reporting Agencies Agree to Overhaul of Credit Reporting Processes in Settlement with New York A.G.

On March 9, 2015, the New York Attorney General announced a settlement with three national credit reporting agencies. The companies allegedly failed to maintain proper procedures for ensuring the accuracy of consumer credit information in violation of the Fair Credit Reporting Act. According to one study, allegedly 26% of consumers had a material error on their credit report. During the Attorney General’s investigation, all three companies denied wrongdoing, but they agreed to take voluntary measures to improve the credit reporting process. The terms imposed on the credit reporting agencies include: (1) allowing a consumer to initiate a dispute regardless of whether that consumer has requested a report from that agency; (2) permitting New York consumers to engage in one additional dispute; (3) providing an additional credit report to a consumer whose credit report is affected by a dispute and reinvestigation; (4) adding a layer of employee review to the dispute-resolution process; (5) requiring 180 days before medical debt is reported; (6) promoting greater visibility of, (7) designing a process of identifying illegal lenders, (8) engaging in a media campaign regarding consumer rights on credit reports. The agreement also requires the creation of a working group devoted to developing a set of best practices for handling information furnished to credit reporting agencies.