Equifax Agrees to Reforms in Credit Reports : Consumers: The firm will also pay $150,000 in the agreement that brings it in line with actions forced on TRW.


Atlanta-based Equifax, one of the nation's largest credit reporting agencies, agreed Tuesday to improve the accuracy and protect the privacy of information contained in consumer credit reports.

Equifax, which will pay $150,000 in "investigation costs" to 18 state attorneys general as part of the deal, said it will also provide consumers with easy-to-read copies of their own credit reports for no more than $8.

The company will also protect the privacy of consumer information by extending its voluntary ban on selling consumer credit data to direct marketing firms--a step that the nation's two other big credit reporting firms, TRW and Trans Union, have yet to take.

The agreement, struck after an extensive 18-state audit of the company's operations, essentially brings Equifax into compliance with reforms forced on TRW Inc.'s credit reporting arm late last year.

TRW, which had been sued by the Federal Trade Commission and attorneys general in 19 states, settled the FTC suit last December by agreeing to respond more quickly to consumer complaints, provide clear and accurate information to consumers about their credit reports and pay a $300,000 fine.

Although Equifax maintained that many of the reforms officially adopted Tuesday had already gone into effect, some consumer advocates called the deal a "significant step in the right direction."

"Taken as a whole, I think this agreement will effect significant changes for consumers," said Susan Henrichsen, a California deputy attorney general involved in the 18-state task force. "We think consumers will receive their reports more promptly and see quicker responses to disputes. We also hope that credit reporting agencies will start to consider consumers--not just the banks and finance companies that are their customers--as a result of this agreement and our settlement with TRW."

However, others said the deal falls short of the sweeping reforms necessary to fix problems in the oft-maligned credit reporting industry.

"It shows that Equifax knows there is a problem, so it is a step forward," said Michelle Meier, counsel for government affairs at Consumers Union in Washington. "It certainly falls short of what's needed to clean up the credit reporting industry. Congress needs to get off the dime and pass one of the credit reporting bills they've been considering for the past two years."

Indeed, Tuesday's deal is just the latest volley in a long-term battle between the credit reporting firms, government and consumer advocates.

The battle stems from allegations that credit reporting companies often disseminate inaccurate and damaging information. They are also often slow to correct mistakes, consumers complain, despite a 1970 law--the Fair Credit Reporting Act--that requires that corrections be made promptly.

Meier also said it is far too costly for consumers to get copies of their reports in order to ferret out inaccuracies.

Historically, the big credit reporting firms have charged between $8 and $20 for consumers to get copies of their own reports. (There are about 900 credit bureaus operating nationwide. But the industry is dominated by Equifax, Trans Union Corp. of Chicago and Cleveland-based TRW Information Services.)

TRW now provides consumers with one credit report free each year. And the others will provide free reports if consumers are turned down for credit because of damaging credit information.

However, those who simply want to check their reports for accuracy must pay $8 per report at Equifax and between $15 and $20 per report at Trans Union. For a couple, that means minimum charges would amount to $46 if husband and wife each got copies from each of the big three reporting companies.

Legislation being weighed in Congress would tighten the rules on the entire credit reporting industry and, possibly, lower the fees as well. However, bills introduced in the House and Senate have faced strong opposition from the credit industry and appear doomed to failure if a handful of revisions are not made.

The touchiest issue in the bills are "preemption" amendments pushed through by the industry that would prohibit states from passing their own laws to further strengthen the national rules.

A spokesman for Rep. Esteban E. Torres (D-Pico Rivera), sponsor of the House bill, said Torres will try to get the preemption amendment killed when the bill goes to a full congressional vote later this month. If the amendment stays, Torres and consumer advocates said they will probably withdraw their support for the proposed law.

Details of the Equifax Agreement

Equifax, one of the nation's biggest credit reporting agencies, agreed to operational changes that should make it simpler for consumers to get copies of their credit reports and verify their accuracy. Specifically, the agreement requires Equifax to:

* Furnish consumer credit reports within four days of request.

* Charge no more than $8 per report to consumers and provide reports for free when consumers are turned down for credit.

* Investigate and resolve disputed entries within 30 days.

* Provide consumers with corrected versions of their credit reports after investigations are complete and notify consumers of their right to include a dispute statement in the credit report when they continue to disagree with a listed item.

* Notify consumers if a deleted item is re-entered into their credit file.

* Provide a toll-free phone number to respond to consumer questions. (The number is 1-800-685-1111.)

* To implement within 12 months a system that will allow consumers to see and understand their "risk score," which helps determine whether credit applications are accepted.

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