The Federal Trade Commission has issued a follow-up study of credit report accuracy (the “Follow-Up Study”) that found most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate.
The congressionally-mandated study is the sixth and final study on national credit report accuracy by the FTC. It follows up on a study issued by the FTC in 2012 that examined how many consumers claimed to have errors on one of their three major credit reports.
The 2012 study found, among other things, that one in five consumers had an error that was corrected by a credit reporting agency (“CRA”) after it was disputed on at least one of their three credit reports. The study also found that about twenty percent of consumers who identified errors on one of their three major credit reports experienced an increase in their credit score that resulted in a decrease in their credit risk tier, making them more likely to be offered a lower auto loan interest rate.
The Follow-Up Study focuses on 121 consumers who had at least one unresolved dispute from the 2012 study and participated in a follow-up survey. It finds that 37 of the consumers (31 percent) stated that they now accepted the original disputed information on their reports as correct. However, 84 of these consumers (nearly 70 percent) continue to believe that at least some of the disputed information is inaccurate. Of those 84 consumers, 38 of them (45 percent) said they plan to continue their dispute, and 42 (50 percent) plan to abandon their dispute, while four consumers are undecided.
The Follow-Up Study also examined whether consumers from the 2012 study who had their credit reports modified after disputing information on their credit reports had any of the negative information that had been removed subsequently reappear on their reports. The study found two instances of this, representing about 1 percent of these consumers.
Due to the relatively small number of consumers who participated in the Follow-Up Study, the FTC determined not to recommend any specific legislative action regarding supposed credit reporting accuracy at this time. However, given the findings of the Follow-Up Study, the FTC recommended the following:
- That the CRAs review and improve the dispute results notification process to ensure the notices and explanation of investigation results are provided to consumers;
- That the CRAs continue to explore efforts to educate consumers regarding their rights to review their credit reports and dispute inaccurate information; and
- That consumers continue to examine their credit reports annually by using https://www.annualcreditreport.com and follow the FCRA dispute process when potential inaccuracies are identified. Following the resolution of a dispute, consumers should continue to check their credit reports for potential rare instances of reinsertion.
The FTC’s continued study of these issues is consistent with the increased regulatory attention being paid to consumer reporting accuracy by both the FTC and the Consumer Financial Protection Bureau. Both CRAs and furnishers should carefully study that guidance to ensure compliance. Troutman Sanders LLP regularly represents CRAs and furnishers in FCRA compliance issues and litigation. We will continue to monitor these developments.