AG Healey announced $6 million multistate settlement with national credit reporting agencies
Equifax, Experian, and TransUnion Agree to Significant Changes to Benefit Consumers
BOSTON – In an effort to provide significant protections for consumers nationwide, Attorney General Maura Healey has joined a coalition of states in announcing a settlement with the three national credit reporting agencies following disputes over credit report errors, providers of consumer debt information, and marketing concerns.
Under the settlement, Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC have agreed to pay the 31 participating states a total of $6 million and to make a number of changes to their business practices to benefit consumers.
“Credit reports affect countless aspects of day-to-day life, from a person’s ability to obtain a mortgage and buy a house to a job hunter’s success in finding employment,” AG Healey said. “This settlement will improve the accuracy of those reports and provides important protections to consumers.”
The states initiated an investigation into certain segments of the credit reporting industry following concerns from consumers that the agencies do not maintain the right procedures to assure the complete accuracy of credit reports. Consumers also complained that the agencies tried to sell them on products during credit report dispute calls, and that the agencies did not prevent information, that was removed in credit reports following a reinvestigation, from reappearing.
The three credit reporting agencies have agreed to comply with state and federal laws, including the Fair Credit Reporting Act. Key provisions of the settlement include:
Higher standards for data furnishers:
- The credit reporting agencies must maintain information about problem data furnishers – or providers of consumer debt information to the agencies – and provide a list of those furnishers to the states upon request.
- The credit reporting agencies and data furnishers must use a better, more detailed system to share data with each other.
Limits to direct-to-consumer marketing:
- The credit reporting agencies cannot market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.
- The credit reporting agencies must tell consumers that purchasing a product is not a requirement for disputing information on their credits reports.
Added protections for consumers who dispute credit reporting information:
- The credit reporting agencies must implement an escalated process for handling complicated disputes, such as those involving identity theft, fraud, or mixed files — where one consumer’s information is mixed with another’s.
- When consumers initiate disputes, the credit reporting agencies must send any supporting documents that the consumers provide to the data furnishers.
- 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 credit reporting agencies are generally prohibited from adding information about fines and tickets – such as speeding or parking tickets – to credit reports.
- The credit reporting agencies cannot place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency, which gives consumers time to work out issues with their insurance companies.
A credit reporting agency must also tell consumers how they can further dispute the outcome of an investigation, such as by filing a complaint with other agencies, and will provide a link to its online dispute website, free of ads and any marketing, offers advertisements, on www.annualcreditreport.com.
Under the terms of the settlement, the agencies will pay a total $6 million to the participating states, including approximately $160,000 to Massachusetts. Consumers with concerns or questions can visit the AG’s website for more information.
The settlement was joined by the Attorneys General of 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.
This case was handled by staff of Attorney General Healey’s Insurance and Financial Services Division, including Assistant Attorney General Lydia French, Chief Glenn Kaplan, and Legal Analyst John-Michael Partesotti.