Rutledge Announces $6 Million Multi-State Settlement with Credit Reporting Agencies
May 21, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge, with 30 other state attorneys general, have announced a major settlement with three national credit reporting agencies – Equifax Information Systems LLC, Experian Information Solutions Inc. and TransUnion LLC. The settlement is a result of a multistate investigation initiated in 2012 by Ohio Attorney General Mike DeWine.
Under the terms of the settlement, the credit reporting agencies have agreed to pay the participating states a total $6 million, of which Arkansas will receive $113,876.33, and make a number of changes to their business practices to benefit consumers.
The investigation that began in 2012 focused on consumer disputes about credit report errors, monitoring and disciplining data furnishers (providers of credit reporting information), accuracy in consumer credit reports and the marketing of credit monitoring products to consumers who call the credit reporting agencies to dispute information on their credit report.
“Arkansas consumers should be able to trust that they will receive a fair and accurate representation of their credit from any reporting agency,” said Attorney General Rutledge. “These three agencies broke that trust and are being held accountable for their actions. This settlement will ensure proper safeguards are in place so that consumers are not provided with errors and misinformation about their credit.”
A violation of the settlement by any of the credit reporting agencies may be enforced by the states, according to individual state laws.
Under the settlement, the credit reporting agencies have agreed to increase monitoring of data furnishers, to require additional information from furnishers of certain types of data, to limit direct-to-consumer marketing, to provide greater protections for consumers who dispute information on their credit reports, to limit certain information that can be added to a credit report, to provide additional consumer education, and to comply with state and federal laws, including the Fair Credit Reporting Act.
The following are key provisions of the settlement.
Higher standards for data furnishers:
- The credit reporting agencies must maintain information about problem data furnishers and provide a list of those furnishers to the states upon request.
- The credit reporting agencies and data furnishers must use a better, more detailed system to share data.
Limits to direct-to-consumer marketing:
- The credit reporting agencies cannot market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.
- The credit reporting agencies must tell consumers that purchasing a product is not a requirement for disputing information on their credit reports.
Added protections for consumers who dispute credit reporting information:
- The credit reporting agencies must implement an escalation process for handling complicated disputes, such as those involving identity theft, fraud, or mixed files — where one consumer’s information is mixed with another’s.
- Each credit reporting agency must notify the other agencies if it finds that one consumer’s information has been mixed with another consumer.
- The credit reporting agencies must send a consumer’s supporting documents to the data furnisher.
- Consumers may obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute.
Limits to certain information that can be added to a consumer’s credit report:
- The credit reporting agencies are generally prohibited from adding information about fines and tickets to credit reports.
- The credit reporting agencies cannot place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency, which gives consumers time to work out issues with their insurance companies.
- The credit reporting agencies must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.
Additional consumer education:
- The credit reporting agencies must tell consumers how they can further dispute the outcome of an investigation, such as by filing a complaint with other agencies.
- Each credit reporting agency must provide a link to its online dispute website on annualcreditreport.com, and the credit reporting agency’s dispute website must be free of ads and any marketing offers.
The changes required under the settlement will be implemented in three phases to allow the credit reporting agencies to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date.
Participating in the settlement are the attorneys general from: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.