When Those Credit Reports Are Wrong : Right now there’s little you can do; that could, and must, change soon
A credit report cost James Russell Wiggins of Washington his job because it erroneously said he had pleaded guilty to cocaine possession. Bill collectors hassled Gregory N. Evans of Englewood, Colo., for months to collect debts that were mistakenly listed as his by a credit reporting company.
Who needs such grief? No one, yet thousands of consumers have been denied a car, house or even a job because of sloppy credit reports compiled by one of the 1,000 credit reporting companies. That consumers have to suffer so is an outrage.
So it’s no surprise that a consensus is emerging in Congress that it’s time to update the 1970 Fair Credit Reporting Act. When the law was enacted, credit reports were compiled by hand. Today, sophisticated computer systems enable credit reporting companies to amass huge collections of consumer credit files and sell their lists and files to other businesses.
Major credit reporting bureaus spew out 450 million reports a year with errors in as many as 40% of the files, U.S. Rep. Richard H. Lehman, a Democrat from Sanger, Calif., told a House consumer affairs subcommittee last week. He has introduced a bill to strengthen protections in the credit reporting laws by giving consumers the right to see all their files and to receive a free copy of their own report once a year. Consumer advocates also want provisions that would provide prompt correction of errors, require credit bureaus to notify consumers after adverse information is placed on their record and bar the release of information for marketing lists without consent.
These are badly needed changes, considering that the Federal Trade Commission reports that complaints about the privacy and accuracy of credit reports rose 50% in 1990, to 9,000, and now are No. 1 in consumer complaints to the agency. A spot check by the California Public Interest Group showed that consumers who complained to the FTC had tried on average for nearly six months to resolve their problems and many had made more than five phone calls, with no success at getting errors corrected.
Erroneous credit reports that cause consumers to lose jobs or credit are inexcusable. Credit reporting is a $1-billion-a-year business that should not make mistakes, especially with computers that make it so easy to add or delete information.
Greater consumer protection will give greater incentives to companies to be error-free.
