Experian accused of failing to properly investigate consumer disputes

A top watchdog agency for consumer finance has accused the credit rating company Experian of failing to properly investigate consumer disputes.

In an announcement Tuesday, the Consumer Financial Protection Bureau (CFPB) said it had sued the company for unlawfully failing to investigate consumers' issues.

“The CFPB alleges that Experian does not take sufficient steps to intake, process, investigate, and notify consumers about consumer disputes, resulting in the inclusion of incorrect information on consumer reports,” the agency's news release said.

The CFPB alleges Experian has violated the Fair Credit Reporting Act, which requires an agency take steps to ensure that reports filed by consumers are accurate and an investigation is conducted.

The bureau alleges Experian violated the law in “numerous ways,” including by conducting sham investigations that don’t properly address a consumer’s dispute and by “improperly reinserting inaccurate information” on a consumer’s report.

“Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law," CFPB Director Rohit Chopra said in a statement.

The CFPB said the company’s failure on disputes, among other issues, violates the Consumer Financial Protection Act’s prohibition on unfair acts or practices.

The bureau has the authority to take action against companies that violate consumers' rights. The suit against Experian is seeking to stop the company from unlawful conduct and to provide redress for harmed consumers.

In a statement to The Hill, Experian said the lawsuit relates to matters the entire industry has been discussing with CFPB. Experian said it has operated in "good faith" with the bureau throughout the process. 

"Despite our constructive engagement and long track record of working alongside the CFPB to ensure consumers can easily dispute potentially inaccurate information, the CFPB chose to file a lawsuit with no communication, and no response to our outstanding communications with them," Experian's statement said. 

The company said the lawsuit does not have merit and is contrary to its precedent, calling the suit an example of "irresponsible overreach" from CFPB. 

"Our legal position is strong, we will defend it vigorously and are confident we will prevail," the company said, adding that it takes its responsibility to consumers seriously. "We take great steps to ensure we investigate every consumer dispute thoroughly and go above and beyond the requirement of the law." 

"We take strong exception to the substance and the one of the CFPB's accusations," Experian said. 

Updated at 3:45 p.m. EDT