CFPB Finds Violations of Credit Report Accuracy Requirements, Including for Survivors of Human Trafficking

Examiners also found furnishers failed to correct false information and reported fraudulent information.

The Consumer Financial Protection Bureau (CFPB) published an edition of Supervisory Highlights to share key findings from recent examinations about continuing accuracy problems in the credit reporting system. The CFPB found consumer reporting companies failed to ensure the accuracy of credit reports, including by failing to exclude information resulting from alleged identity theft or human trafficking. The CFPB also found furnishers – companies that provide information to consumer reporting companies – failed to correct false or fraudulent information sent to consumer reporting companies.

“Survivors of human trafficking and victims of identity theft have the right to block information improperly placed on their credit report,” said CFPB Director Rohit Chopra. “We will be taking additional steps to ensure that companies correct false and inaccurate information on credit reports.”

Consumer reporting companies and furnishers play a crucial role in ensuring the accuracy and integrity of information contained in credit reports. Inaccurate or false information can infect credit reports because of reporting failures by consumer reporting companies or by those who furnish information, including banks, loan servicers, and debt collectors. Inaccurate or false information can also end up on credit reports when consumer reporting companies and furnishers do not follow their dispute resolution obligations or their obligations relating to identity theft and human trafficking.

The CFPB continues to prioritize examinations of consumer reporting companies and furnishers. CFPB examiners have found failures by these companies to follow a rule implemented in June 2022 to help survivors mitigate the financial consequences of human trafficking. The rule requires credit reporting companies to block, from credit reports, adverse information that resulted from human trafficking. Specifically, today’s edition of Supervisory Highlights found:

• Consumer reporting companies failed to block or remove information related to identity theft and human trafficking: Examiners found that companies refused to honor consumer requests to block information associated with identity theft based on overbroad criteria; failed to inform consumers when blocks were denied or rescinded; failed to provide victims of identity theft with summaries of rights; and failed to timely block all information resulting from human trafficking identified by consumers.
• Consumer reporting companies accepted information from unreliable furnishers: Examiners found companies accepted information from furnishers that may have been no longer providing reliable, verifiable information about consumers. For example, consumer reporting companies continued to include information from furnishers that failed to respond to all or nearly all disputes or that issued the same responses to all disputes.
• Furnishers provided information to consumer reporting companies they knew was false: Examiners found that auto loan furnishers continued to share incomplete or inaccurate information for several months or even years after learning the information was false, incomplete, or inaccurate. In other instances, furnishers provided information even after they determined the information was fraudulent or due to identity theft.
• Furnishers did not follow requirements for dispute investigations and identity theft: Examiners found that some furnishers continued to furnish information that consumers were disputing without indicating the information was in dispute. In other instances, furnishers failed to conduct investigations into the accuracy of information consumers disputed.

In response to the CFPB’s findings, the involved consumer reporting companies and furnishers are taking corrective actions. For example, CFPB examiners directed consumer reporting companies to revise their compliance processes to ensure that they process all human trafficking block requests per the law. In other instances, furnishers conducted lookbacks to ensure they deleted all accounts they determined to be opened fraudulently.

In addition to its supervision work, the CFPB has taken regulatory and enforcement actions to strengthen the consumer reporting and furnishing systems. The CFPB launched a rulemaking to remove many types of medical debt from credit reports. The CFPB also issued advisory opinions to address inaccurate background check reports and sloppy credit file sharing practices.

In November 2023, the CFPB ordered Toyota Motor Credit to pay $60 million for illegal lending and credit reporting misconduct. In October 2023, the CFPB and Federal Trade Commission took actions against TransUnion for illegal rental background check and credit reporting practices, for which TransUnion was ordered to pay $23 million.

Read this edition of Supervisory Highlights.

Read consumer complaints about consumer reporting companies and furnishers.