Mississippi lawsuit on credit reports tees off on Experian WASHINGTON — Mississippi has sued the credit-reporting giant Experian, alleging sweeping errors in the company’s data and routine violations of consumer-protection laws. The state’s action follows a multistate investigation of credit bureaus led by Ohio and represents a significant new legal challenge to the industry. Mississippi Attorney General Jim Hood’s complaint against Experian Information Solutions was filed without fanfare last month in a Biloxi state courthouse and transferred to Mississippi federal court late last week. The key allegations in Mississippi’s complaint are not entirely new: Consumer advocates, plaintiffs’ attorneys, the Federal Trade Commission and the federal Consumer Financial Protection Bureau have assailed credit bureaus for inadequately addressing erroneous credit reports. In May 2012, Ohio Attorney General Mike DeWine announced, as a result of The Dispatch’s “Credit Scars” series, that he was working with about two dozen other states to investigate the inner workings of the three national credit-reporting agencies: Experian, Equifax and TransUnion. Contacted yesterday, a spokeswoman for DeWine said the office generally doesn’t confirm or comment on an investigation until it leads to a court filing. The Mississippi complaint stands out as the first major legal action by a state against a credit bureau in recent years, and its litigation might pressure other states and federal agencies to take public action. The lawsuit accuses Experian of knowingly including error-riddled data in the credit files of millions of Americans, jeopardizing their ability to obtain loans and sensitive government security clearances, and fouling employment-related background checks. Experian has even wrongly reported that consumers are on a federal terrorism watch list, the lawsuit says. The Dispatch investigation found that consumers virtually are powerless to correct credit-report errors with the three big national credit-reporting agencies, documenting the plight of thousands who could not correct even the most-obvious error: “I am not dead.” The national credit-reporting agencies use a highly automated computer system to communicate with financial customers that provide consumer-account information. That system doesn’t easily allow for a human to investigate when consumers complain about mistakes. Experian is the largest of the companies, with revenue of $4.8 billion last year. Both Experian and a spokesman for its trade group, the Consumer Data Industry Association, declined to discuss the litigation or related questions. However, Experian warned investors this year that “it remains uncertain” how the Consumer Financial Protection Bureau and its British counterpart “may affect our credit and consumer business processes and business models in the future.” Experian told investors that, to the best of its knowledge, it complies with data-protection requirements, but it warned, “We might fail to comply with international, federal, regional, provincial, state or other jurisdictional regulations, due to their complexity, frequent changes or inconsistent application and interpretation.” According to an FTC study, 5 percent of all consumers’ credit reports contain errors that could harm their ability to obtain credit. Despite the errors, the Mississippi lawsuit said, Experian provides no straightforward way for consumers to correct erroneous blemishes affecting their credit. When consumers file a dispute, Experian reflexively finds in favor of the bank or debt collector that reported the debt, Mississippi said. And when consumers call to complain, the lawsuit said, Experian employees attempt to sell consumers credit-monitoring products of questionable value. “Experian has turned its failures to maintain accurate credit reports and its refusal to investigate consumer disputes into a business opportunity,” Hood, a Democrat, said in a statement. Much of Mississippi’s case appears to be rooted in documents obtained directly from Experian. At the company’s request, examples of allegedly inappropriate business practices were censored in the public court filing because Experian considers them a trade secret. dispatch/content/stories/business/2014/06/17/mississippi-complaint-tees-off-on-experian.html
Posted on: Thu, 26 Jun 2014 19:36:33 +0000
Trending Topics
Recently Viewed Topics
© 2015