CFPB Issues Warning to Businesses About Free Credit Reports

The Fair Credit Reporting Act entitles consumers to an annual free credit report from all reporting companies, not just Equifax, Experian and TransUnion. Hundreds of specialty reporting agencies collect information about medical payments, tenant history, check-writing behaviors, employment history and insurance claims. The companies report information to creditors, landlords, insurance companies, employers and other companies that affect consumers’ everyday lives. Without access to any of their nationwide credit reports, consumers cannot verify their accuracy and, thus, dispute information as is their right under law.

The Consumer Financial Protection Bureau issued a bulletin to specialty credit reporting agencies Nov. 30, reminding them of their obligation under the FCRA to provide a ‘’streamlined process for consumers to request a free annual consumer report.” The agency had reviewed many of the agencies’ practices and determined several may be in violation of the law. In addition, warning letters were issued to six of the specialty agencies that were found in possible violation.

“Nationwide specialty consumer reporting agencies can have great influence over a consumer’s tenancy, insurance premiums, or even employment,” said CFPB Director Richard Cordray. “Today, the CFPB is reminding these companies that they must follow the law and provide consumers with easy access to their free annual report. If we have reason to believe that companies are not following the law, we will take action.”

The CFPB bulletin reminds the nationwide specialty reporting agencies they must provide easy ways for customers to access their free annual reports. For example, the companies must provide a toll-free number published in any telephone directory in which the company’s name appears. The number must also be “clearly and prominently posted on the company’s Web site.” Federal law also requires the credit bureaus to provide “clear and easy instructions” for consumers to access their reports, as well as adequate staff to handle customers’ requests.

In its study of the specialty consumer reporting agencies, the CFPB examined telephone book listings and Web sites for various nationwide specialty credit bureaus and attempted to request credit reports. The study found companies that did not list toll-free numbers, as well as companies that provided toll-free numbers but did not allow easy access for consumers to request credit reports.

When sending the warning letters to companies found in violation, the CFPB asked the companies to advise of any steps taken to comply with the law within the next 30 days, or to provide an explanation why the legal requirements do apply. At this time, the CFPB is not accusing any companies of wrongdoing; however is noncompliance continues the specialty reporting agencies could be subject to enforcement actions.

As many consumers are unaware of credit reporting agencies outside of the three major bureaus, the CFPB has created a list of 40 specialty companies, including the agencies’ Web sites and toll-free numbers. Free credit reports from Experian, Equifax and Transunion can be accessed once a year from the Web site