Credit-Report Errors Grab Congress’s Attention
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Here's your Money Briefing for Wednesday, June 1st. I'm J.R. Whelan for The Wall Street Journal. When it comes to being able to get a credit card to take out a loan to, say, buy a house, the difference maker can be the accuracy of what's on your credit report. But a wave of inaccurate data showing up in consumers' credit reports has gotten the attention of lawmakers in Washington.
There was an increase in identity theft during the pandemic, as well as the payment deferment programs that came to be during the pandemic, and that both of these things created new ways for errors to get added onto credit reports.
Coming up, our banking reporter, Anna Maria Andriotis, broke the story in How Lawmakers Want Answers about how credit reporting firms dealt with consumer complaints during the pandemic. She'll be here with the details and to talk about what you can do if you find something incorrect on your credit report. That's after the break.
Lawmakers in Washington are looking into how the big credit reporting firms handled consumer complaints about erroneous information on their credit reports during the pandemic. WSJ Banking reporter Anna Maria Andriotis broke this story, and she's here with more. Anna Maria, thanks so much for being with us.
Great to be speaking with you.
So, Anna Maria, Congress is looking into how the companies handled errors on credit reports during the pandemic. What did the companies do or not do that raised a red flag?
So specifically what has caused concern among lawmakers as well as at the CFPB, the agency that regulates the credit reporting firms, is the big increase in consumer complaints to the CFPB about errors on their credit reports that have not been addressed by the credit reporting firms. Specifically, one of the things that Democrat lawmakers pointed out when they sent letters to the credit reporting firms informing them that they were opening up a probe into this matter are the changes that the credit reporting firms made to their complaint response processes early on in the pandemic that the lawmakers say resulted in a significant decrease in responsiveness from the credit reporting firms to consumer complaints pertaining to errors on their credit reports.
Now, we've talked on the show before about how it's fairly common for people to find errors on their credit reports. But what is it about this particular situation that caused it to pop up onto lawmakers' radar?
The letter pointed out that there was an increase in identity theft during the pandemic, as well as the payment deferment programs that came to be during the pandemic, and that both of these things created new ways for errors to get added onto credit reports. So with identity theft, essentially fraudsters opening accounts in other people's names would result potentially in people seeing accounts on their credit reports that they themselves never opened up. In addition, with the payment deferment programs, this was the first time that there was such a wide-scale availability of deferment and forbearance programs with these being rolled out. during the early days of the pandemic, there was a provision in Congress's first coronavirus stimulus package that barred lenders that offered these deferment-type options from recording the missed payments as being late with the credit reporting firms.
So you had two things playing out simultaneously that created a potential opening for errors or more errors to get added to people's credit reports.
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