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BREAKING! Congress calls for Credit Bureau Investigation!

By: Daniel Rosen October 25, 2022

I have breaking news! Congress just dropped a Credit Bureau bombshell!

The Chairman of the Select Subcommittee on the Coronavirus Crisis called on the CFPB to investigate Experian, Equifax, and TransUnion for allegedly failing to address consumer disputes, as well as discarding disputes without investigation and potentially violating the Fair Credit Reporting Act!

So, on this week's Podcast, I cover the allegations made against the Bureaus, their response to the allegations, and what this means for our industry!

 

Ok, let's get into this…

A few days ago, Representative Jim Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent a LETTER to Rohit Chopra, the Director of the Consumer Financial Protection Bureau, requesting the CFPB review the three bureaus Equifax, Experian, and TransUnion for possible violations of the Fair Credit Reporting Act.

This call for an investigation followed Chairman Clyburn's three letters to the CEOs of Equifax, Experian, and TransUnion asking for information on the companies' failures to respond to and resolve credit reporting inaccuracies raised by consumers during the pandemic.

Now I know you credit heroes have noticed the increase in all those stall letters you get from the bureaus, right? Or just no response at all?  Well, that's a big part of what this is about. And it looks like the bureaus are getting called out, which is awesome! 

The Select Subcommittee began reviewing the three Credit Bureau's dispute processes after the CFPB found that the Credit Bureau's rate of correcting or removing errors on consumer Credit Reports had dropped dramatically during the pandemic.  

How this relates to us? Well…

Chairman Clyburn's letter alleges, "Information obtained by the Select Subcommittee indicates that there are longstanding problems with the Nationwide Consumer Reporting Agencies' practices for responding to consumers who challenge credit reporting errors."

Ha. We could've told him that. Check out our episode on Credit Bureau Stall Tactics to learn more about how they like to do business and how terrible they are.

The Subcommittee raised concerns about whether the Bureaus fulfill their obligations to consumers and the CFPB under the Fair Credit Reporting Act.

Chairman Clyburn also added, "The prevalence of credit reporting errors has been particularly concerning at a time when Americans have needed access to credit in order to weather difficult economic circumstances brought on by the pandemic. Errors in credit reports can reduce consumers' credit scores, potentially blocking access to loans, housing, and employment, among other serious consequences."

Chairman Clyburn followed that up with the Subcommittee's findings and requested that the CFPB use its supervisory authority to investigate and address these serious issues. 

Here's the thing to remember…

This is a developing story, and we still don't have all the information yet. It's also unclear if or when this investigation will begin or how it will change the industry. But…

ANY industry change that benefits a consumer's ability to dispute errors on reports and to repair their credit is a WIN for everyone!

That said, let's take a look at what the Subcommittee found…

I've included a link to Chairman Clyburn's LETTER, so you can read it or follow along…

Okay, according to the Select Subcommittee on the Coronavirus Crisis…

Consumers Dispute Errors and File Complaints Far More Often Than Previously Thought

Consumers have been disputing information in their credit reports on a scale much greater than previously thought. The CFPB believes the total number of disputes is more than DOUBLE their previous estimates.

For example, the CFPB estimated that all three Credit Bureaus would receive 8 million dispute submissions COMBINED in 2021. But JUST Equifax received nearly 14 million in 2021!

Between 2019 and 2021, consumers disputed nearly 336 million items—on their credit reports across the three Bureaus.

And during 2020 and 2021, the CFPB received a record-breaking number of complaints about the Bureaus, more than 619,000 in 2021 alone. 

And I'm not surprised about all these complaints. We can see for ourselves the number of stall letters we're suddenly receiving from the bureaus. Or no response at all!  

Here's what I believe…

We know that 8 out of 10 credit reports contain errors, so it's our right to dispute them.  

The more people realize good credit is an essential part of modern life. The more people are going to demand Credit Bureau accuracy and accountability.

I don't know why they have the power they have; we didn't vote for them. They aren't a part of the government. And it's messed up that they have so much control over our lives. 

It's unfortunate that financial literacy isn't taught in schools and unfortunate that we as adults have to learn this all the hard and expensive way. In my case, I didn't start learning how to be financially literate until a bank error happened, and the system attacked me. That changed the course of my life, and that's now why I want to help others. 

Greater financial literacy will inspire greater financial recovery efforts. The Bureaus really should be the ones leading this charge, not fighting the very people who need help the most. 

And why do they do this? Because it makes them and the banks trillions of dollars. So they have all the money in the world to hire lobbyists and pressure politicians into keeping the laws working in their favor.

Ok, enough of my rant.  

Back to the Subcommittee findings. They allege that…

The Bureaus are Disregarding Millions of Disputes Based on Speculative or Overly Broad Criteria

The Select Subcommittee obtained evidence indicating that the Bureaus discard millions of disputes every year WITHOUT INVESTIGATION.

At least 13.8 million dispute submissions were discarded without investigation between 2019 and 2021 alone!

Yup. Credit Heroes see this happening every day. We've been discussing it daily in our community through the entire pandemic. That's when they really accelerated this bad behavior.

All three Bureaus claim that they discard disputes without investigation when they suspect unauthorized 3rd-party involvement. The Subcommittee determined, however, that each of the Bureaus uses vague and speculative criteria to determine that a dispute was submitted by an unauthorized 3rd-party, such as multiple disputes with similar language or arriving in similar envelopes.  

For example, Equifax disregards mail that "tends to use identical language and format [and] come from the same zip code."  

Experian discards disputes based on "envelope characteristics" and "letter characteristics," including factors such like "same or similar ink color," "same or similar font," and "same or similar verbiage."  

TransUnion has a reference guide for disregarding disputes based on envelope-related criteria.

First, THIS IS REALLY STUPID!!! It's an obvious stall tactic and a direct attack on consumers' ability to repair their credit, but I'll save the rest of my thoughts until the end of this section of findings.

The Select Subcommittee stated that while the Bureaus are not required to investigate illegitimate disputes, discarding these disputes runs contrary to the Fair Credit Reporting Act if any of them have been submitted directly by consumers or their authorized representatives. (That's you, Credit Hero).  

The findings suggest that the Bureaus could be improperly discarding millions of disputes every year, unfairly punishing consumers who take advantage of government-furnished or publicly available support services. 

Consumers are often not experts on credit reporting and may use online resources when disputing information with the Bureaus, such as sample template letters with similar language, some of which are provided by the CFPB itself!

BOOM! Mic DROP. 

Thank you, Select Subcommittee, for saying what we're all thinking. 

My takeaway from this section of findings…

Throwing away consumer financial disputes because envelopes look similar is really, really stupid. How many types of envelopes even exist? Like 2 or 3? 

The Subcommittee already made the best point, people use what they have access to, and most often, that's a free resource or template they find online. Discarding any financial dispute without really investigating it is lazy! And not only that, it's unethical and immoral. 

Even if 99% of those discarded disputes were improperly filed or frivolous, that means 1% of those disputes were legitimate. 

But that 1% isn't a number. It's a person. It's thousands of people, and their financial future was thrown in the trash because they used the wrong envelope. The Bureaus should be embarrassed that this is even being used as their argument.

Back to the Subcommittee findings…

The Bureaus Overly Rely on Data Furnishers to Investigate Disputes

The Subcommittee obtained evidence showing that all three Bureaus referred more than half of their disputes to Furnishers for investigation.  

Specifically, between 2019 and 2021, Equifax referred between 61-62% of disputes to Furnishers each year, Experian referred between 54-56%, and TransUnion referred between 80-82%.

This reliance is concerning because CFPB and other stakeholders have previously cited Furnishers for often conducting insufficient investigations and the Bureaus for often accepting the Furnisher's response without independent investigation.

And the last major finding from the Subcommittee…

The Majority of Disputes Do Not Result in Relief for Consumers

The Select Subcommittee obtained evidence to suggest that the Bureaus may not be allocating enough staff to adequately investigate disputes.  

Despite each Bureau reporting a similar number of disputed items in 2021, the number of staff and staff time that each Bureau allocated to responding to disputes and CFPB complaints varied greatly.

Ultimately, the majority of credit report disputes have not resulted in relief—in other words, correction or removal of reported errors—for consumers. 

From 2019 to 2021, Equifax made no changes to 53-57% of disputed items each year, Experian made no changes to around 48% each year, and TransUnion made no changes to 47-51% of disputed items in the three years that they reviewed. 

While some portion of the disputes may be meritless, some are not.  

The CFPB and others have documented cases of consumers experiencing stress, frustration, and financial hardship as a result of the Bureau's failure to correct legitimate errors on their credit reports. Unresolved errors in credit reports can, in some cases, cause consumers to lose access to loans, housing, and employment.

No shit!

Well, all I can say again is "thank you," Subcommittee…

My takeaway from all of these findings…

Number 1: The bureaus are a**holes. And they're finally under a microscope!

Number 2: Don't be discouraged! The first step to change is recognizing the problem.  

These Congressional findings confirm what all of us in the Credit Industry have long suspected…

The Bureaus are not our friends. The Bureaus are businesses. They don't see you as a person. Your financial data is their product. Your personal information makes them and the banks trillions of dollars. It's about time we stood up to them and demanded change. 

And we just got a massive vote of confidence from Congress that reform is on its way! 

So that is awesome! 

And don't forget, Credit Repair might be an uphill battle, but we're fighting the good fight!  Like the late, great John Lewis said: "Get in good trouble." And standing up to Credit Bureaus and banks is definitely good trouble, and it changes lives.

I'll keep you updated as the story unfolds.

I’ll end by saying…

If you don’t already have a Credit Repair Cloud account, check it out. It’s the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial

And If you’d like me to hold you by the hand as you launch your own credit repair business, check out our Credit Hero Challenge!

Challenge-Stack-Mockup-Final

It’s an amazing program where you’ll learn the processes that have made millionaires, and it costs less than you'll spend taking your family to McDonald’s for dinner.

We’ve got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!

Until then, remember, keep the facts on your side…

And keep changing lives!

Be sure to subscribe on your favorite platform below!

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Topics: Podcast

Transcript

Daniel Rosen  0:00  

Hey everybody, I have breaking news. Congress just dropped a credit bureau bombshell, the chairman of the Select Subcommittee on the Coronavirus crisis called on the CFPB to investigate Experian, Equifax and TransUnion for allegedly failing to address consumer disputes, as well as discarding disputes without investigation and potentially violating the Fair Credit Reporting Act. And today, I'm going to cover the allegations made against the Bureau's I'm going to cover their response to the allegations and what this means for our industry. So you better stick around. 

 

So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets. 

 

If this is your first time listening to my podcast, every week I cover industry news, financial tips and entrepreneurial advice for bootstrapping your business from nothing. This show is the best how to guide for business owners, and there's no other podcasts like it, so be sure to click that subscribe button now and get ready to start changing lives. Okay, so a few days ago, Representative Jim Clyburn, chairman of the Select Subcommittee on the Coronavirus crisis called on the CFPB to investigate Experian, Equifax and TransUnion for allegedly failing to address consumer disputes, as well as discarding disputes without investigation and potentially violating the Fair Credit Reporting Act. Yes, I'm talking about the credit bureaus being accused of some really bad stuff. So today, I'm going to cover the allegations made against the Bureau's their response to the allegations and what this means for our industry. But before we get started, this podcast is brought to you by credit hero score. Credit hero score is the only credit monitoring service that integrates directly with credit repair cloud, get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit hero score.com.

 

Okay, let's get into this. A few days ago, Representative Jim Clyburn, chairman of the Select Subcommittee on the Coronavirus crisis, he sent a letter to Rohit Chopra, the Director of the Consumer Financial Protection Bureau, requesting that the CFPB review the three bureaus Equifax, Experian, and TransUnion for possible violations of the Fair Credit Reporting Act. This call for an investigation followed Chairman Claiborne's three letters to the CEOs of Equifax, Experian, and Transunion, asking for information on the company's failures to respond to and to resolve credit reporting inaccuracies raised by consumers during the pandemic. Now, I know you credit bureaus have been noticing the huge increase in all those stole letters that you get from the Bureau's right or just no response at all. Well, that's a big part of what this is all about. And it looks like the Bureau's are getting called out, which is awesome. The Select subcommittee began reviewing the three credit bureaus disputing process after the CFPB found that the credit bureaus rate of correcting or removing errors on consumers credit reports had dropped dramatically during the pandemic. How does this relate to us? Well, Chairman Clyburn, his letter alleges. information obtained by the Select subcommittee indicates that there are long standing problems with the nationwide consumer reporting agencies practices for responding to consumers who challenge credit reporting errors. Ah, well, we could have told him that right? Check out our episode on the credit bureau stall tactics to learn more about how they like to do business and just how terrible they are. Now, the Select subcommittee raised concerns about whether the Bureau's fulfil their obligations to consumers and the CFPB under the Fair Credit Reporting Act. Chairman Clyburn also added that the prevalence of credit reporting errors has been particularly concerning At a time when Americans have needed access to credit in order to weather difficult economic circumstances brought on by the pandemic, errors in credit reports can reduce consumers credit scores, potentially blocking their access to loans, housing, employment, and other serious consequences. Chairman Clyburn followed that up with the subcommittee's findings, and requested that the CFPB use its supervisory authority to investigate and address these serious issues. Here's the thing to remember, this is still a developing story, and we still don't have all the information yet. It's also unclear if or when this investigation will begin, or how will will change the industry, but any industry change that benefits a consumers ability to dispute errors on their reports and to repair their credit, that is a win for everyone. That being said, let's take a look at what the subcommittee found. I've included a link to Chairman Claiborne's letter over there in the show notes so that you can read it yourself or follow along. Okay, so, according to the Select Subcommittee on the Coronavirus crisis, consumers have been disputing information in their credit reports on a scale much greater than previously thought, at least double the previous CFPB estimates of disputes filed with the Bureau's in 2021 Equifax just Equifax received nearly 14 million dispute submissions, which is far more than the CFPB estimated for all three bureaus combined, their estimate was 8 million for all three bureaus. But this was 14 million. Now between 2019 and 2021, consumers disputed nearly 336 million items on their credit reports across all three bureaus. And during 2020 and 2021, the CFPB received a record breaking number of complaints about the Bureau's more than 619,000 in 2021 alone. And I'm not surprised about these complaints, we can see it for ourselves the number of stole letters that we're suddenly getting from the Bureau's or that we're not getting any response at all. Here's what I believe. We know that eight out of 10 credit reports contain errors. So it's our right to dispute them, the more people realise that good credit is an essential part of modern life, the more people are going to demand credit bureau accuracy and accountability. Now, I don't know why the credit bureaus have the power that they have. We didn't vote for them. They aren't a part of the government. And it's really messed up that they have so much control over our lives. And it's unfortunate that they don't teach financial literacy in schools. And very unfortunate that we as adults have to learn all this the hard and expensive way. In my case, I didn't start learning how to be financially literate, until a banker happened. And then the system attacked me. And that changed the course of my life. And that's now why I want to help others. greater financial literacy will inspire greater financial recovery efforts. The Bureau's really should be the ones leading this charge and not fighting the very people who need help the most. And why do they do this? Well, it's because it makes them and the bank's trillions of dollars, so they have all the money in the world to hire lobbyists and pressure politicians into keeping the laws working in their favour. Okay, enough of my rant. Back to the subcommittee findings. They allege that the Bureau's are disregarding millions of disputes based on speculative or overly broad criteria. The Select subcommittee obtained evidence indicating that the Bureau's discard millions of disputes every year without investigation, at least 13 point 8 million dispute submissions were just disregarded without investigation between 2019 and 2021. Alone. Yup, credit bureaus. We see this happening every day. We've been talking about an every day in our community through the entire pandemic, and that's when they really accelerated this bad behaviour. All three bureaus claim that they discard disputes without investigation when they suspect unauthorised third party involvement. The subcommittee determined however, that each of the three bureaus uses vague and speculative criteria to determine that a dispute was submitted by an unauthorised third party such as mo Trouble disputes with similar language or arriving in similar envelopes. For example, Equifax disregards mail that tends to use identical language and format and comes from the same zip code. Experian discards disputes based on envelope characteristics and letter characteristics, including factors such as same or similar ink colour, same or similar font, and same or similar verbiage. TransUnion has a reference guide for disregarding disputes based on envelope related criteria. First, this is really stupid. It's an obvious stall tactic, and it's a direct attack on consumers ability to repair their credit, but I'll save the rest of my thoughts until the end of this section of findings. The Select subcommittee stated that while the Bureau's are not required to investigate illegitimate disputes, discarding these disputes runs contrary to the Fair Credit Reporting Act, if any of them had been submitted directly by consumers or their authorised representatives. That's you credit hero. The findings they suggested that bureaus could be improperly discarding millions of disputes every year, unfairly punishing consumers who take advantage of government funded or publicly available support services. Consumers are often not experts on credit reporting, and may use online resources when disputing information with the Bureau's such as sample template letters with similar language, some of which are actually provided by the CFPB. itself. Boom, mic drop, thank you select subcommittee for saying what we're already thinking. My take away from this section of findings. Well, throwing away consumer financial disputes, because envelopes look similar is really, really stupid. How many types of envelopes even exist, like two or three, come on, the Select subcommittee already made the best point, which is people use what they have access to. And most often, that's a free resource, or a template that they find online, discarding any financial dispute without really investigating, that's really lazy. And not only that, it's unethical, and it's immoral, even if 99% of those discarded disputes were improperly filed or frivolous. That means that 1% of those disputes were legitimate, and that 1% It isn't a number. It's a person, it's actually 1000s of people, the bureau should be embarrassed that this is even being used as their argument. Okay, back to the subcommittee's findings, the Bureau's overly rely on data furnishers to investigate disputes. The subcommittee obtained evidence showing that all three bureaus referred more than half of their disputes to furnishers for investigation, specifically between 2019 and 2021 Equifax referred between 61 to 62% of disputes to furnishers. Each of those years experience referred 54 to 56% and Transunion, referred between 80 to 82%. This reliance is concerning because CFPB and other stakeholders have previously cited furnishers for often conducting insufficient investigations and the Bureau's for often accepting furnishers response without independent investigation, and the last major finding from the subcommittee, the majority of disputes do not result and relief for consumers. The Select subcommittee obtained evidence to suggest that the Bureau's may not be allocating enough staff to adequately investigate disputes despite each bureau reporting a similar number of disputed items in 2021, the number of staff and staff time that each bureau allocated to responding to disputes and CFPB complaints. It varied greatly. Ultimately, the majority of credit report disputes have not resulted in relief. In other words, correction or removal of reported errors for consumers from 2019 to 2021. Equifax made no changes to 53 to 57% of disputed items each year, and Experian made no changes to around 48% each year, and TransUnion made no changes to 47 to 51% of disputed items in the three years that they were reviewed. Well While some portion of the disputes may be meritless, some are not the CFPB and others have documented cases of consumers experiencing stress, frustration and financial hardship as a result of the Bureau's failure to correct legitimate errors on their credit reports, unresolved errors in credit reports can and in some cases, cause consumers to lose access to loans, housing

 

and employment. No. Well, all I can say again, is thank you, subcommittee. My take away from all these findings. Well, number one, the Bureau's aren't and I'm so glad they're finally under a microscope. And number two, don't be discouraged. The first step to change is recognising the problem. These congressional findings, they confirm something that all of us in the credit industry have already long suspected. The Bureau's they're definitely not our friends. Okay. The Bureau's are businesses. They don't see you as a person, your financial data is their product, and your personal information makes them and the banks trillions and trillions of dollars. So it's about time we stood up to them and demanded change. And we just got a massive vote from Congress that reform is on its way. So that is awesome. And don't forget credit repair, it might be an uphill battle. But we're fighting the good fight. Like the late great, John Lewis said, get in good trouble. And standing up to the credit bureaus and banks is definitely good trouble and it changes lives. And I'm going to keep you updated as the story unfolds. And just a reminder, this podcast is brought to you by credit hero score. Credit Bureau score is the only credit monitoring service that integrates directly with credit repair cloud, get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit hero score.com. And now for my favourite part of the episode. Every week, I feature one of our credit heroes inside our credit repair cloud Facebook community so that you can see firsthand what real people are doing as they run and grow their business. And today's spotlight is on Lucia see Lucy has message stood out because she posted seven pictures of customers with scores boosted over 100 points, and 10 or more deletions. But what really resonated for me was her message. She said October has been so good to us so far. Closing out the month strong, stay consistent. Use the search bar in this group, there is a tonne of great information, but also do your due diligence and verify the information given. What are you doing to finish the year off strong, set your goals and take action. And that is a perfect attitude. Lucia enjoy the wins but set goals and take action. And you are absolutely right about the search bar. Chances are if you have a question, someone in the community has already asked and answered it. But there's also a whole lot of misinformation on the internet. So it's always a good idea to verify that answer and make sure it's compliant with the law. So keep up the great work Lucia. I know you're going to finish this year strong. And I'm going to end by saying if you don't already have a credit repair Cloud account, check it out. It's the software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at credit repair cloud.com/free trial. And if you'd like to change lives and grow your very own credit repair business, check out our credit hero challenge. It's a live experience that has helped tonnes of credit heroes to get certified in disputing and to gain confidence as they run their credit repair business on a solid foundation. So they can change a whole lot of lives and make a great living in the process. We're starting the next challenge very soon. So you want to join before the door is closed. Or you're gonna have a long wait until the next one. So sign up right now at credit hero challenge.com. If you're finding value in the things that I share on this podcast, click below to subscribe and follow. Also, if you want to help me out, give me a five star rating. Give me a review or share the show with someone who needs to hear it and help me to change more lives. And if you'd like to read the show notes, they're posted on my blog, and if you have a question or a comment, drop it down below because I read each and every one of them. I would love to hear from you. And I'll respond as soon as I can. So take care credit hero and remember, just because we inherited this system, it doesn't mean we're stuck with it. So let's keep holding these banks and bureaus accountable and keep changing lives. 

 

Want a fast track to creating an amazing business that helps people changes lives and makes you a great living in the process? Then I'd like to invite you to my free online training at creditrepaircloud.com/freetraining. In this free training, you will learn how to get clients willing to pay you even if you're just starting out how to get easy credit repair results without being an expert, and how to get all the clients you'll ever need without paying for advertising. Again, this training is absolutely free. Just visit creditrepaircloud.com/freetraining



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