On May 20, the three national consumer reporting agencies (CRAs) – Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC – inked a deal with thirty-one state attorneys general to end an investigation initiated in 2012 by the Ohio Attorney General’s office.
Under the multistate settlement, which is in the form of an Assurance of Voluntary Compliance (AVC), the CRAs agreed to make a number of changes to their business practices that will enhance their ability to collect accurate and complete consumer information and that will benefit consumers by providing more transparency, as part of their National Consumer Assistance Plan. The highlights of the Plan include:
Higher standards for data furnishers:
- The CRAs are required to maintain information about certain data furnishers and provide a list of those furnishers to the states upon request.
- The CRAs and data furnishers must use a more detailed system for sharing data.
Limits to direct-to-consumer marketing:
- The CRAs will not be allowed to market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.
- The CRAs must inform consumers that purchasing a product is not a requirement for disputing information on their credit reports.
Added protections for consumers who dispute credit reporting information:
- The CRAs must implement an escalated process for handling complicated disputes, such as those involving identity theft, fraud, or mixed files (in which one consumer’s information is mixed with another’s).
- Each CRA must notify the other agencies if it finds a mixed file.
- The CRAs must send a consumer’s supporting documents to the data furnisher.
- Consumers may obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute.
Limits to certain information that can be added to a consumer’s credit report:
- The CRAs are generally prohibited from adding information about fines and tickets to credit reports.
- The CRAs cannot place medical debt on a credit report until 180 days after the account is reported to the CRA, giving consumers time to work out issues with their insurance companies.
- The CRAs must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.
Additional consumer education:
- The CRAs must inform consumers how they can further dispute the outcome of an investigation into a dispute, such as by filing a complaint with other agencies.
- Each CRA must provide a link to its online dispute website on the website www.annualcreditreport.com, and the CRAs’ dispute websites must be free of ads and any marketing offers.
The requirements in the AVC will be implemented by the CRAs in three phases, providing the CRAs with time to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date.
Under the settlement, the CRAs will also collectively pay the participating states $6 million. The AVC allows the states to use their share of the payment for reimbursement of attorneys’ fees and/or investigative costs, future public protection purposes, payment into the states’ consumer protection enforcement funds, or other permissible consumer protection purposes. The states and the CRAs both explicitly acknowledged in the AVC that the payment was “not a fine, civil penalty, or forfeiture.”
Participating in the settlement were attorneys general from Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.