40 MILLION CREDIT ERROR VICTIMS: Consumer Credit Client Alert (www.CharlesJeromeWare.com)

The U.S. Federal Trade Commission (FTC) is warning consumers to check their credit reports on a regular basis, since a new FTC study reports that 1 in 5 consumers have errors in their credit report from the three major credit reporting agencies: Experian PLC, Equifax, Inc., and Transunion Corp.

In sum, as many as 40 million American consumers have a mistake on their credit report, and over 20 million American consumers have significant mistakes on their report.

The Federal Trade Commission study also said that 5 percent of the consumers identified errors in their reports that could lead to them paying more for mortgages, auto loans or other financial products.

The study looked at reports for 1,001 consumers issued by the three major agencies — Equifax, Experian and TransUnion. The FTC hired researchers to help consumers identify potential errors.
The study closely matches the results of a yearlong investigation by The Columbus Dispatch. The Ohio newspaper’s report last year said that thousands of consumers were denied loans because of errors on their credit reports.

The FTC says the findings underline the importance of consumers checking their credit reports.
Consumers are entitled to a free copy of their credit report each year from each of the three reporting agencies.

The FTC study also found that 20 percent of consumers had an error that was corrected by a reporting agency after the consumer disputed it. About 10 percent of consumers had their credit score changed after a reporting agency corrected errors in their reports.

In September, the federal Consumer Financial Protection Bureau gained the authority to write and enforce rules for the credit reporting industry and to monitor the compliance of the three agencies. Prior to that, the reporting agencies weren’t subject to ongoing monitoring by federal examiners.

The CFPB hasn’t yet taken any public action against the agencies. However, it is accepting complaints from consumers who discover incorrect information on their reports or have trouble getting mistakes corrected. The agencies have 15 days to respond to the complaints with a plan for fixing the problem; consumers can dispute that response.

By contrast, the FTC can only take action if there is an earlier indication of wrongdoing. It cannot demand information from or investigate companies that appear to be following the law.

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Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States. [GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, et al.]
www.CharlesJeromeWare.com

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[www.washingtonpost.com/politics/ftc study says 1 in 5 consumers had error in a credit report from major agency; www.ftc.gov/opa/2013/02/creditreport.shtm; www.usatoday.com/02-11-2013; www.abcnews.go.com/02-11-13]