Equifax Receives Civil Investigative Demand from the CFPB for Credit Reporting Issues

Buried in among Equifax’s Q1 2014 financial results is this:

CFPB Investigation. In February 2014, we received a Civil Investigative Demand (a “CID”) from the Consumer Finance Protection Bureau (the “CFPB”) as part of its investigation to determine whether nationwide consumer reporting agencies have been or are engaging in unlawful acts or practices relating to the advertising, marketing, sale or provision of consumer reports, credit scores or credit monitoring products in violation of the Dodd Frank Act or the Fair Credit Reporting Act. The CID requests the production of documents and answers to written questions. We are cooperating with the CFPB in its investigation and are in discussions with the CFPB regarding our response to the CID. At this time, we are unable to predict the outcome of this CFPB investigation, including whether the investigation will result in any action or proceeding against us.

Equifax is one of the Big Three — along with TransUnion and Experian — that provide credit reporting information. They’re regulated, like collection agencies, by the CFPB, and are specifically beholden to both the Dodd Frank Act and the Fair Credit Reporting Act.

As reported on insideARM.com Wednesday, the U.S. Senate is also interested in credit furnishers. U.S. Senators Brian Schatz (D-Hawai‘i), Sherrod Brown (D-Ohio), Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), and Richard Blumenthal (D-Conn.) introduced S.2224, the Stop Errors in Credit Use and Reporting (SECURE) Act of 2014. The bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.

According to an FTC study, “of the 1,001 consumers who participated in the study, 262 (26 percent) reported a potential material error in one or more of their three reports and filed a dispute with at least one CRA. Most of the errors reported by participants resulted in at least some modification to their credit reports, which, as noted, the study treated as confirming the errors.”

For a better understanding of how the Fair Credit Reporting Act affects collection agencies, debt buyers, and credit reporters, we’ve put together a Compliance Overview on the FCRA, available now in our Research Library.