Americans are mostly powerless to correct harmful errors on their credit reports thanks to loopholes and obstacles in the federal law governing credit-reporting agencies, according to a report Sunday in an Ohio newspaper that was widely picked up by national media outlets.
A lack of government regulations leads to mistakes that deny thousands of consumers the chance to purchase homes or cards, obtain a student loan, get medical care or simply open a checking account, according to The Columbus Dispatch. The newspaper conducted a yearlong investigation analyzing some 30,000 consumer complaints filed with the Federal Trade Commission over 30 months starting in 2009 and with attorneys general in 24 states.
The complaints alleging violations of the Fair Credit Reporting Act by the three credit bureaus document how consumers across the country have failed to fix even obvious mistakes such as wrong birth dates and names.
The Washington-based Consumer Data Industry Association spoke for the three credit-reporting agencies.
Stuart K. Pratt, the trade group's president and CEO, questioned the validity of conclusions derived from self-reported complaints that he says the FTC makes clear are unverified. He said the credit-reporting agencies estimate that at least a fifth of complaints are from people trying to have negative but accurate information removed.
Pratt also told the newspaper that credit card companies and other creditors that send account updates to the agencies share the blame for any inaccurate information.
According to the newspaper's report, nearly 200 people complained to the FTC that their credit reports listed them as dead - preventing them from accessing credit.
Almost a fourth of the complaints to the FTC and more than half of those to attorneys general involved mistakes in consumers' financial accounts for credit cards, mortgages or car loans. Car loans that had been paid off were reported as repossessions, and credit cards that had been paid off showed up as delinquent.
