Credit bureaus draw the most consumer complaints to the CFPB
- Credit reports were the most-complained-about product in 2018, an analysis of Consumer Financial Protection Bureau database finds.
- The three major credit bureaus, Equifax, Experian and TransUnion, were the most-complained-about companies last year.
- Mistakes on their reports can result in consumers paying more for credit or getting turned down for a job or mortgage.
Getting incorrect or outdated information fixed or removed from one's credit report is a problem many consumers share. It's so common that hundreds of thousands of them lodged complaints against the three major credit bureaus last year. And that made credit reports the most-complained-about product in 2018, according to a new analysis of more than 257,000 complaints to the Consumer Financial Protection Bureau.
Credit reporting, credit-repair services or other personal consumer complaints accounted for 43 percent of all complaints to the CFPB last year. That's up from 23 percent in 2016, according to U.S. PIRG Education Fund, a nonpartisan consumer advocacy group.
Complaints against Equifax, Experian and TransUnion include ones involving data breaches and customer-service issues in their aftermath. The 2017 Equifax breach affecting nearly 150 million consumers is a case in point. Yet last year, 61 percent of consumers identified wrong information as the main problem with their credit report, according to the study.
Mistakes on credit reports can lead to consumers having to pay more for credit or being turned down for jobs or mortgages. The three major credit bureaus may be less responsive to resolving the issues "because consumers are not their direct customers," PIRG stated. Instead, the credit bureaus' primary clients are lenders.
Not surprisingly, Equifax, Experian and TransUnion rank as the top three most-complained-about companies. They drew 88,333 of the total 257,193 complaints in 2018, or 34 percent of complaints for the year.
Publicizing "bad interactions"
After credit bureaus, the nation's largest banks were next up in drawing consumer wrath. JPMorgan Chase holds the dubious distinction of being the most-complained-about non-credit bureau entity in 2018, followed by Wells Fargo and Bank of America. The top complaint against all three banks related to mortgages.
Capital One and Citibank were the seventh- and eighth-most-complained-about companies, with the top gripe against both financial institutions having to do with credit or prepaid cards. Navient Solutions and Ocwen Loan Servicing placed ninth and 10th, the former for issues involving student loans and the latter for mortgage-related woes.
After credit repair, debt collection was the second-most complained about product category, followed by mortgages.
On the positive side, 97 percent of complaints received a timely response, and more than 223,000 resulted in relief for consumers. That included more than 75,000 who were given monetary compensation from the companies they complained about, PIRG found.
"For decades, people had nowhere to publicize their bad interactions with credit bureaus, mortgage companies and debt collectors," David Rossini, chair of PIRG's consumer protection program, said in a news release. "The ever-growing number of complaints filed with the CFPB show that the Bureau is doing what it was designed to do -- offer consumers a forum to bring these bad actors to light."
Hiding the database?
The CFPB began collecting complaints in December 2011, and has since compiled a public database of nearly 1.2 million. CFPB Director Kathy Kraninger told Reuters last month she hasn't ruled out making the database private -- as industry groups have lobbied for and PIRG is advocating against.
"If the CFPB decides to conceal its database," said Mike Litt, PIRG's consumer campaign director, "there will be an increase in wrongdoing, and we won't even know about it."