There has been a lot of news recently about the broken nature of the credit reporting system, including a CFPB report detailing how the credit reporting agencies routinely ignore consumer complaints and requests to remove errors on their credit report. Thankfully, new bipartisan legislation is being introduced in Congress to address this problem and help consumers currently being exploited by entities in the credit reporting system.
We believe that Americans have the right to a credit report that is accurate, fair, and backed by evidence. But that right is diminished if consumers are blocked from seeking help—and that is exactly what is happening.
While some Americans can manage to navigate the process for disputing and removing credit report errors on their own, others do not have the time or may not fully understand the procedures and laws available to them. For these millions of Americans, expert help from credit repair professionals and other consumer advocates is a lifeline. Sadly, the FCRA loophole prevents consumer advocates from formally representing consumers in the dispute process. Worse yet, many furnishers have adopted a policy of wholesale rejecting legitimate complaints whenever they suspect the correspondence was written by, or with assistance from, a third party.
Many are surprised that a consumer could be penalized for seeking help—perhaps because it just doesn’t make sense. Just as Americans turn to trusted experts to navigate tax season, resolve a legal matter, or buy a home, Americans should have the right to consult with and be represented by consumer advocates with deep knowledge of the consumer credit system and the rights of the consumer for advice and guidance when dealing with credit furnishers and debt collectors. The IRS does not reject income tax returns prepared by a CPA, judges do not dismiss cases if they think a lawyer wrote the papers, and prospective homeowners are not blocked from buying a home if they retain a realtor.
We applaud this new legislation, which will expand the ability of consumers to use credit repair organizations and positively affect their ability to repair their credit. We have argued that Americans should have the right to consult with and be represented by consumer advocates with deep knowledge of the consumer credit system and consumer rights when dealing with credit furnishers and debt collectors. We have partnered with nonprofit groups—including the African American Empowerment Coalition, the National Asian American Coalition and the National Diversity Coalition—to lobby Congress to close the FCRA loophole.
For example, the Rev. Andre Chapple, senior pastor at Faith Church Los Angeles and chief executive of the African American Empowerment Coalition, regularly holds free financial literacy workshops for 200-300 community members each month. The goal of these workshops is to help hard working Americans understand how credit works, why it is important, and steps they can take to maintain or improve their credit. Through a partnership with AACCP member company Progrexion, Pastor Andre’s workshops also help participants dealing with credit reporting errors—an issue that unfortunately impacts millions and millions of Americans—learn about their right to a credit report that is fair, accurate, and substantiated. Unfortunately, nonprofit community groups like the African American Empowerment Coalition are limited in their ability to help consumers with the complex and time-consuming dispute process because of the FCRA loophole. Letters sent by the Coalition on behalf of workshop participants may be ignored under the law—effectively leaving individuals on their own.