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CDIA Responses to 60 Minutes Questions

Mr. Stuart Pratt
President and CEO of the Consumer Data Industry Association
1090 Vermont Avenue, N.W., Suite 200
Washington, DC 20005
Phone: 202.371.0910 

February 1, 2013 

Dear Mr. Pratt, 

As you know, “60 Minutes” is producing a story about the credit reporting industry.  You declined our request for an on-camera interview.  We’d like to give you the opportunity to respond, in writing, to the following issues raised in our story: 

Ohio Attorney General Mike DeWine tell us that the dispute process employed by the major credit reporting agencies violates the Fair Credit Reporting Act; he says the CRAs do not conduct reasonable investigations of consumer disputes. 

CDIA:  Federal courts across the nation have repeatedly found that the credit reporting industry dispute process not only follows the letter of the law but its spirit, as well.  Further, Congress required the Federal Trade Commission to review the entire dispute process in 2003. The extensive review lasted one year and it also did not find any violation of law.  The system is successful.  95% of consumers surveyed by PERC indicated they were satisfied with the results of their reinvestigation requests. 

Several former Experian dispute agents tell us that they had to process at least 90 consumer disputes a day.  They say they had no phones or email access to investigate disputes, and they say they had no ability to send furnishers any supporting documentation associated with a consumer's dispute.  They tell us their job was to assign a code to a dispute, and they say it was not their job to investigate.  What's more, a former employee in Experian's ACDV division tells us that he processed more than 200 ACDVs a day without ever seeing the consumer's original dispute letter or supporting documentation, and he says he could not question or investigate a furnisher's response. 

CDIA: CDIA will try to address some of these questions from an industry standpoint.  Only the lender is qualified and has sufficient information to determine accuracy of the data. 

That said, the function of each bureau is to serve as a single point of contact for consumers to reach, and act as a clearinghouse for access to the tens of thousands of lenders and furnishers who can make that determination. Through this system, consumers have the ability to efficiently and rapidly submit their disputes. The dispute system is designed to serve consumers and 95% of consumers surveyed were satisfied with the results of their reinvestigation requests.  Further, credit bureau personnel are trained to be proactive when considering information submitted by the consumer.  In fact a Consumer Financial Protection Bureau report published in December 2012 reported that 15% of all disputes are resolved by credit bureau personnel, without ever being transmitted to creditors.  Federal law requires lenders to investigate disputes and requires credit bureaus to move quickly to send a consumer's dispute to the lender who reported the data.  The consumer dispute system is designed specifically to quickly and accurately deal with consumer disputes, which is what consumers want.  The use of dispute codes is an integral part of the technology used in the dispute process, and it results in a system that, as noted above, has an extremely high rate of consumer satisfaction. 

Specific to your comment regarding Experian’s process, below is their comment:  

Following is a Response to the Questions From Experian 

"We cannot speak to the motivation of the statements attributed to former Experian employees, particularly as the comments are out of context and simply not reflective of the way Experian runs its business. I can say without question that Experian is focused on providing the highest quality services to consumers. That commitment is reflected in consumer surveys in which 95% of consumers are satisfied with the results of their dispute requests.  In addition, Experian does have procedures where its agents can and do question dispute responses directly with data furnishers. Our agents are trained to be proactive when considering information submitted by consumers; they do in fact have the ability to include supporting information provided by the consumer with each dispute.

Experian does drive for efficiency in its processes in full support of consumers' needs for speed in resolving their issues. Importantly, however, our agents are empowered to resolve consumer disputes incorporating highest quality and customer service without time parameters. 

Regarding the former employee’s comment that “he could not question or investigate a furnisher’s response,” that is simply not true.  We utilize a specialized platform, created by our industry and mandated by federal law, for our agents to effectively communicate with data furnishers when processing disputes. The document that the agent reviews includes both the consumer’s dispute as well as the data furnisher’s response. If the agent feels that the response is unclear, they are empowered to phone verify the response. This has been our agents’ process for many years.  

Consumers need speed in resolving their disputes, and we direct our efforts toward that goal. We complete dispute processing in 14 days on average, well below the required 30 day turnaround required under federal law.” 

We’d also like to give you the opportunity to explain why neither the CDIA nor any representatives of the major credit reporting companies agreed to an on-camera interview. 

CDIA: CDIA decided to provide responses to questions in writing to ensure that viewers and 60 Minutes producers would have the full benefit of careful, thoughtful answers that inform this complex dialogue.  

We would appreciate a written response as soon as possible. 

Lastly, we will seek comment from you as soon as the Federal Trade Commission releases the results of its eight-year study on the accuracy of credit reports. 

CDIA: Consumers want to know the potential impact of any errors and if they cost them more. The methodologies used by both PERC and the FTC are very similar and were designed to answer that question. In the case of PERC, they found that between .50 and 1 percent of credit reports would have had a material error that affects a consumer’s creditworthiness. They estimate those percentages are accurate plus or minus 1%.  We would expect the results of the FTC study to track closely because of the similarity of the methodologies. That is, perhaps no more than 2% of credit reports containing a material error that would adversely affect consumers in the marketplace. 

Many thanks, 

James Jacoby

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James Jacoby
Producer
60 MINUTES
Tel: 212.975.3614