Credit report disputes more common in minority neighborhoods

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Written by Thomas Ahearn, editor-in-chief of the ESR News blog

In November 2021, the Consumer Financial Protection Bureau (CFPB) released a report on “Conflict over Consumer Credit Reports” which found that consumers in predominantly Black and Hispanic neighborhoods, young consumers and those whose low credit scores were much more likely to have disputes. appear on their credit reports.

“Families living in predominantly black and Hispanic neighborhoods are much more likely to have conflicts with inaccurate information on their credit reports,” CFPB director Rohit Chopra said in a press release on the report. . “Erroneous credit reports are far too prevalent and can jeopardize a fair recovery.”

In almost all of the credit categories examined by the report, consumers residing in predominantly black areas were more than twice as likely to see disputes appear on their credit reports as Thai consumers residing in predominantly white areas. For auto loans, consumers in predominantly black areas were more than three times more likely to have disputes.

Under the federal Fair Credit Reporting Act (FCRA), consumers have the right to file a dispute with consumer reporting agencies (CRAs) to correct inaccuracies in their reports. The FCRA requires rating agencies to process and investigate disputes in a timely manner and correct any inaccuracies discovered by the investigation.

The CFPB is committed to continuing research into the causes of credit report disputes. In October 2021, the CFPB – along with the Federal Trade Commission (FTC) and the North Carolina Department of Justice – filed an amicus brief in a case involving a company seeking immunity from misrepresentation by consumers.

In November 2021, seven US senators sent a letter urging the CFPB to reform the credit assessment industry using the CFPB’s existing supervisory, regulatory and enforcement authority over the largest rating agencies. agencies to improve the accuracy of credit reports, streamline the dispute resolution process, and hold credit rating agencies accountable for errors.

The consumer complaints received by the CFPB reflect a significant concern about inaccuracies in consumer reporting. In 2020 alone, businesses responded to more than 191,000 such complaints, representing about 68% of credit or consumer complaints businesses responded to that year.

Adopted in 1970, the FCRA regulates the declaration of consumers. Because of the importance of the accuracy of consumer reporting to businesses and consumers, the FCRA requires rating agencies to “follow reasonable procedures to ensure the maximum possible accuracy of information about the person to whom relates to the declaration ”.

Employment Screening Resources® (ESR) – one of the world’s leading providers of background checks that was named to the 2021 HRO Today’s Baker’s Dozen list of screening leaders – provides employers with credit reports for the purposes of employment in accordance with federal, state and local laws. To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind. All information on this website is for educational purposes only.

© 2021 Employment Screening Resources® (ESR) – You may not copy or use any part of the ESR News blog or the ESR website for any purpose other than your personal use, without the prior written permission of ESR.

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