Department of Commerce and Consumer Affairs

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

DAVID Y. IGE
GOVERNOR

CATHERINE P. AWAKUNI COLÓN

DIRECTOR

STEPHEN LEVINS

EXECUTIVE DIRECTOR, OFFICE OF CONSUMER PROTECTION

FOR IMMEDIATE RELEASE

May 20, 2015

State Office of Consumer Protection Announces $6 Million Settlement with Credit Reporting Agencies

Equifax, Experian, and TransUnion Agree to Significant Changes

HONOLULU – The state Department of Commerce and Consumer Affairs’ (DCCA) Office of Consumer Protection (OCP) along with 30 state attorneys general today announced a major settlement with the three national credit reporting agencies – Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC.

Under the settlement, the credit reporting agencies have agreed to pay the participating states $6 million and make a number of changes to their business practices to benefit consumers. Of this amount, Hawaii will receive almost $100,000, which will be used for the enforcement of  consumer protection laws in Hawaii.

A violation of the settlement by any of the credit reporting agencies may be enforced by the states according to state law.

“This settlement makes the credit reporting agencies much more accountable to consumers who raise concerns regarding inaccuracies or errors contained in their credit reports,” said OCP Executive Director Stephen Levins.

The investigation focused on consumer disputes about credit report errors, monitoring and disciplining data furnishers (providers of credit reporting information), accuracy in consumer credit reports, and the marketing of credit monitoring products to consumers who call the credit reporting agencies to dispute information on their credit report.

Under the settlement, the credit reporting agencies have agreed to increase monitoring of data furnishers, to require additional information from furnishers of certain types of data, to limit direct-to-consumer marketing, to provide greater protections for consumers who dispute information on their credit reports, to limit certain information that can be added to a credit report, to provide additional consumer education, and 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 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.

 

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.
• Each credit reporting agency must notify the other agencies if it finds that one consumer’s information has been mixed with another’s.
• The credit reporting agencies must send a consumer’s supporting documents to the data furnisher. (The credit reporting agencies implemented this change after the attorneys general initiated their investigation and raised the concern that the pertinent complaint documents were not being sent to the 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 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.
• The credit reporting agencies must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.

Additional consumer education:

• The credit reporting agencies must tell consumers how they can further dispute the outcome of an investigation into a dispute, such as by filing a complaint with other agencies.
• Each credit reporting agency must provide a link to its online dispute website on the website www.annualcreditreport.com, and the credit reporting agency’s dispute website must be free of ads and any marketing offers.

The changes required under the settlement will be implemented in three phases to allow the credit reporting agencies to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date.

Besides Hawaii, participating in the settlement are the states of: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, 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.

OCP Enforcement Attorney Landon M. M. Murata represented the state in this case.

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