CFPB Takes Legal Action Against Experian Over Alleged Credit Violations

Rubber stamp with the word lawsuit stamped red

The CFPB has taken a crucial step by filing a lawsuit against Experian, accusing the company of neglecting consumer complaints and violating federal laws—but what does this mean for consumers?

At a Glance

CFPB accuses Experian of conducting inadequate investigations into consumer disputes.
Errors in credit reports can lead to lowered credit scores, impacting consumers financially.
The CFPB claims Experian violated the Fair Credit Reporting Act and seeks financial penalties.
Experian denies the allegations, standing firm against the lawsuit.

CFPB’s Lawsuit Against Experian

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Experian, one of the largest credit reporting agencies. The complaint was lodged in California and targets Experian’s systematic handling of consumer complaints. The CFPB accuses Experian of failing to investigate consumer disputes properly, leading to misinformation that can severely affect individuals’ access to credit, jobs, and housing. The bureau seeks financial penalties and an order to halt these alleged practices.

According to the CFPB, Experian’s inadequate response to consumer disputes has violated the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act (CFPA). By issuing misleading dispute codes and accepting unverified responses from information furnishers, Experian is accused of perpetuating inaccuracies. This ongoing misinformation reportedly results in adverse outcomes for consumers, such as errors on credit reports affecting credit scores.

Our multi-year investigation found that when consumers contacted Experian with a dispute, the credit reporting behemoth conducted meaningless reviews, rather than investigating them as required by law.

— Rohit Chopra (@chopracfpb) January 7, 2025

Allegations Against Experian

The allegations against Experian highlight a systemic issue in credit reporting practices. Experian is accused of not informing consumers about dispute outcomes and allowing deleted data to reappear on credit reports. Moreover, the CFPB claims that Experian’s reliance on data from furnishers, which may not be thoroughly vetted, further undermines the credibility of its reports. This can have dire consequences, including consumers facing higher interest rates and difficulty securing loans or employment.

Rohit Chopra, director of the CFPB, stated, “When consumers disputed errors on their credit reports, Experian conducted sham investigations.” The importance of rectifying credit report errors cannot be overstated, as inaccuracies can severely undermine a family’s financial stability.

Credit reporting giant Experian failed to properly investigate consumer complaints and didn’t adequately verify information from consumer data providers, the CFPB said in a new lawsuit. https://t.co/3tSznBe8gb

— Bloomberg Law (@BLaw) January 7, 2025

Experian’s Response and the Path Forward

Experian vehemently denies the allegations, stating the lawsuit is without merit and at odds with established regulatory norms. The company stands by its commitment to cooperating with the CFPB and supports its practices as lawful and consumer-focused. “Our legal position is strong, we will defend it vigorously and are confident we will prevail,” Experian noted in a public statement, spotlighting its intent to challenge the lawsuit assertively.

The CFPB’s lawsuit is part of a broader initiative to ensure accountability and improve the quality of information in credit reports. It underscores the CFPB’s role in overseeing consumer financial markets and ensuring industry compliance with federal laws. Consumers are encouraged to stay informed about their rights and utilize resources provided by the CFPB to manage credit-related issues effectively.