Home > Credit Score > Half of Consumers With Credit Report Errors Drop Their Complaints

Comments 0 Comments

Fighting with a credit reporting agency over inaccuracies isn’t easy, and plenty of consumers simply give up, a new Federal Trade Commission study suggests.

Nearly half of consumers engaged in an unresolved dispute with a credit reporting agency wave the white flag, according to a study published this week by the Federal Trade Commission. Of those who surrender while still believing inaccurate information persists on their reports, one-quarter give up because they “do not have enough time” to continue; 10% said they felt there was “little hope” for fixing the error. Another 40% say they gave up because they didn’t think the issue was important, or they had no interest in pursuing the matter.

“Most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate,” the FTC said in announcing the results.

“(This) does not surprise me, it’s not easy for a consumer to file a dispute with the credit bureaus — the time, resource and energy commitment is significant,” said Chi Chi Wu, a consumer lawyer and credit bureau expert at the National Consumer Law Center. “An especially poignant example of this was in the first FTC pilot study, where a consumer with a material error in her credit report explained ‘she was a single mother with twins and could not muster the time to file a dispute.'”

The study, based on a sample of consumers’ credit reports the FTC has been examining for several years, aims to offer a glimpse at what consumers face when they believe they are being unfairly punished by an inaccuracy in their credit reports. The agency used experts to help about 1,000 consumers examine their credit reports and dispute any errors. Initial results, released in 2012, found that about 25% of the participants had errors on their credit reports, and roughly 5% of the participants had errors significant enough to impact their ability to obtain credit.

For this year’s study, the FTC re-interviewed 121 participants who filed unsuccessful disputes over alleged inaccurate information, calling those disputes “unresolved.” Of that group, about 30% of the consumers conceded they’d made an error, and they now accept the original information as correct. But the remaining 70% felt their disputes were still valid. About half that group said they are still fighting the error. The other half have given up, for reasons cited above, and in the chart below.

chart

The report does have good news for consumers. A frustrating phenomenon known as “re-insertion” – which occurs when consumers successfully dispute errors, but they reappear later on their credit reports – seems to have largely been eliminated by the credit bureaus. The FTC found re-insertion on only 1% of reports.

On the other hand, consumers who don’t agree with the outcome of the dispute have reason to be frustrated: 41% say they were never notified that a bureau rejected their dispute, and of those who did receive notice, 48% said they were given no explanation for the rejection.

“We acknowledge the possibility that some portion of these ‘not notified’ consumers in actuality may not remember receiving the notice or may have thrown away the notice as ‘junk mail.’ However, this high proportion of consumers who claim no notification is noteworthy,” the FTC said.

Norm Magnuson, Vice President of Public Affairs for the Consumer Data Industry Association, said the dispute process that consumers can use today has been improved on since the 2012 study.

“We believe this 2013 eOscar© innovation, which wasn’t yet online in 2012 when the FTC study was conducted, ensures greater clarity in terms of disputes and reduces frustration for consumers and their lenders who want to serve them,” Magnuson said.

The FTC recommends consumers vigilantly monitor their credit reports for possible errors; a free annual credit report can be obtained at AnnualCreditReport.com. Consumers can also keep an eye on their credit reports by getting a free credit report summary for free on Credit.com, which is updated monthly, to look for problems that require a closer look at one’s credit.

More on Credit Reports & Credit Scores:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team