CFPB: Complaints About Credit Reporting Agencies Almost Doubled in 2017

Complaints to the Consumer Financial Protection Bureau about the conduct of credit reporting agencies almost doubled in 2017 compared to the previous year -- in part because of last year’s massive data breach at Equifax Inc., according to a new CFPB report published Monday.

The Consumer Response Annual Report shows that consumer grievances regarding credit or consumer reporting comprised a 31 percent plurality of all complaint types received in 2017, followed by debt collection (26 percent) and mortgages (12 percent).

The bureau received a total of approximately 100,000 complaints about the credit reporting sector in 2017, according to the 45-page report, up from 53,900 the previous year and 54,900 in 2015. Since the CFPB started compiling grievances in July 2011, the credit reporting industry has been the subject of 281,100 complaints, according to the independent federal regulator that was established by the 2010 Dodd-Frank Act.

Fifty-five percent of complaints about credit or consumer reporting last year dealt with receiving incorrect information on a report, down from 74 percent in 2016. One-fifth of consumers who submitted complaints about the industry had a “problem with a company’s investigation into an existing issue,” according to the CFPB, up from 11 percent in 2016.

The agency drew a direct line from the data breach announced by Equifax in September -- in which the personal information of 143 million U.S. consumers was potentially compromised -- and the increased number of complaints for credit bureaus in the 2017 report.

“Some consumers complained about being affected by the breach based on the notification they had received from Equifax,” the CFPB said in its report. “Consumers also complained about the customer service they received when they attempted to set up security freezes and alerts.”

Following the data breach, Equifax offered affected customers free access to its identity theft protection services, but the firm was criticized for capping the free service at one year. To find out if they were affected by the breach, consumers were required to enter their surnames and the last six digits of their Social Security numbers on Equifax’s website.

The report noted that other consumers “complained about the terms of the complimentary identity theft service Equifax offered to affected consumers and security concerns with the breach-related website.”

Equifax was the only one of the three major credit bureaus given special attention in the CFPB’s explanation regarding the uptick in complaints about the industry. TransUnion and Experian, the other two major agencies, combined with Equifax made up 76 percent of total complaints about the credit-reporting industry last year.

The CFPB’s report also noted that “consumers generally complained about the same types of problems across all three of the nationwide consumer reporting agencies.”

A spokeswoman for Equifax said in a Monday email to Morning Consult that many credit bureau-related complaints made through the CFPB's portal are disputes, "and may involve incomplete or inaccurate information."

"We know that we did not live up to expectations with the initial consumer support following the incident," she said. "We are committed to fixing that and to being more proactive and transparent in the way that we communicate with consumers."

Consumers made a total of about 320,200 complaints last year — 81 percent of which came through the CFPB’s website, the report noted. An additional 8 percent came through referrals from other federal and state agencies, while 5 percent came over the phone. Complaints also came via mail, email and fax, according to the report.

The debt collection sector has been the subject of the highest number of complaints since the CFPB opened its doors in 2011, with 377,300 complaints lodged between July 21, 2011, and Dec. 31, 2017. The mortgage sector has the second-highest number of complaints, with 301,600, followed by credit and consumer reporting.

Last year's report featured an introduction from then-CFPB Director Richard Cordray, who left the agency in November and returned to his home state of Ohio, where he is running for the Democratic nomination for governor. Cordray's interim replacement, Mick Mulvaney, did not write a similar introduction for this year's report.