Frightening Truth — Credit Bureaus Don't Really Investigate Your Disputes
Written by: Kristy Welsh
Scottsdale, Arizona — Victims of identity theft are further hampered by a lack of diligence on the part of the nation's three major credit bureaus. Even consumers not victims of identity theft have a 1-in-3 chance of having bad information on their report, according the Federal Trade Commission. "If consumers aren't able to get a fair shake during credit disputes, they could be paying thousands of extra dollars per year in interest and insurance rates due to the sloppy methods employed the credit bureaus," says Kristy Welsh, editor of creditinfocenter.com. The three major credit reporting agencies, Experian, Equifax and Trans Union, have a system available through their websites for on-line consumer disputes. Consumers can also request an investigation in writing the old-fashioned way, or over the telephone. With all these tools, false information should be a piece of cake to get off of your report, right? Wrong, says Welsh.
Welsh was made aware of just how careless the credit bureaus are during a recent refinance of her home. Her Equifax report revealed a false tax lien; she disputed it in writing and was dumbfounded when the tax lien was "verified", and would remain. She called Equifax to ask how they verified the tax lien, as was her right under the Fair Credit Reporting Act (FCRA). The agent had no information, and frustrated, Welsh asked Equifax rep if the courthouse where the lien was recorded had been contacted. She was informed that creditors were never contacted directly. Welsh called the Missouri courthouse herself, verified it wasn't hers and got a name and number, and pressured Equifax to call the court clerk, or face legal action. The lien was removed.
So how do the credit bureaus handle consumer disputes? They all use an automated system called e-Oscar. Consumer disputes are reduced to a 2-digit code ("not mine", for example) and the dispute is submitted electronically through e-Oscar. Any supporting documentation sent by the consumer is not passed along. The creditor reporting the information is never contacted. Recent court rulings, such as Cushman v TransUnion, Stevenson v. TRW (Experian), and Richardson v. Fleet, Equifax, et al, have determined each time that a credit bureau can't merely "parrot" information from the creditors and collection agencies; under the FCRA, they have to conduct an independent reasonable investigation to ensure the validity of the dispute.
"The average consumer probably wouldn't be as tenacious as I was, and would have dropped the matter," says Welsh.
For more information on e-Oscar:
Consumer Data Industry Association
1090 Vermont Avenue, N.W., Suite 200
Washington, D.C. 20005-4905
Phone: (866) 696-7227
Fax: (202) 371-0134
Credit Bureau Contact information: