Washington, DC- On Tuesday, the Wall Street Journal broke the news that Equifax wrongly sent out incorrect credit scores for millions of Americans as they were trying to buy homes and cars. Reportedly, the errors changed some customers’ scores by as much as 20 points, causing them to be rejected for loans through no fault of their own. In response to this unfortunate error by Equifax, the American Association of Consumer Credit Professionals (AACCP) released the following statement:
“It’s deeply troubling that at a time when many Americans were already struggling to purchase homes and automobiles, this unfortunate error by one of the nation’s largest credit rating agencies made millions of people’s lives even harder. This breach by Equifax allegedly caused many customers to be rejected for home and auto loans through no fault of their own. It also highlights how broken the credit reporting system is.
“While we are glad Equifax claims they’ve fixed this egregious error, millions of more Americans are still struggling to climb out of economic holes or purchase a home or car due to latent errors on their credit scores. Navigating the complex process to repair their credit scores often proves too difficult for many. That’s why Americans have a right to seek help from qualified credit repair professionals. Unfortunately, debt collectors and credit ratings agencies like Equifax are currently allowed to ignore correspondence from consumers contesting faulty credit scores if they were assisted by a third party, including a credit repair professional.
“Americans deserve the right to seek professional help in navigating a complicated system just as they have the right to utilize services from accountants and lawyers. Thankfully, recent legislation introduced by Rep. Al Lawson seeks to address this issue by closing the loophole in the Fair Credit Reporting Act that allows debt collectors and credit rating agencies to ignore correspondence from credit repair professionals. The AACCP is working hard to help pass this legislation that will grant Americans struggling with faulty credit scores the right to seek help from qualified professionals.”
Many consumers would give up if they had to navigate the process for challenging and removing errors on their own. In fact, this is exactly what the Federal Trade Commission (FTC) found when it analyzed the credit reporting industry—around half of consumers abandon the process before completing it because they found it confusing and time consuming. Consumers use professional services for everything else. It’s common sense that they should be able to use them in credit reporting and that they should get an investigation into disputes from furnishers.
The FCRA loophole prevents consumer advocates from formally representing consumers in the dispute process, and worse yet, allowed many furnishers to adopt a policy of wholesale rejecting legitimate complaints whenever they suspected the correspondence was written by or with assistance from a third party. The new legislation proposed in Congress would repeal the loophole and more easily allow consumers to utilize credit repair professionals and require furnishers to fulfill their legal obligation to conduct investigations of consumer disputes.
The American Association of Consumer Credit Professionals (AACCP) applauds this new legislation, which will expand the ability of consumers to use credit repair organizations and positively affect their ability to repair their credit. In meetings on Capitol Hill, the AACCP has 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. The AACCP 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.