Experian Sued by CFPB for Botching Consumer Data Disputes (2)

Credit reporting giant Experian Plc failed to properly investigate consumer complaints and didn’t ensure the accuracy and completeness of information supplied by consumer data furnishers, the Consumer Financial Protection Bureau said in a new lawsuit.

Experian Information Solutions Inc. didn’t properly collect information from customers disputing items on their credit reports and didn’t send complete dispute records to companies that provided data for the reports, the CFPB said in its complaint filed Tuesday in the US District Court for the Central District of California.

Experian also accepted explanations from data furnishers such as credit card companies and debt collectors “even when that response was improbable or illogical on its face or when Experian has other information in its possession that alerts or should alert Experian to the possibility that the furnisher might be unreliable,” the CFPB said.

Experian’s complaint dispute processes resulted in incorrect information appearing on customers’ credit reports, artificially reducing their credit scores, the CFPB said. Lower credit scores can lead to people paying higher interest rates on loans and can impact employment and rental housing opportunities, among other issues.

Experian violated the 1970 Fair Credit Reporting Act and the 2010 Consumer Financial Protection Act, which created the CFPB, the agency said.

“When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law,” CFPB Director Rohit Chopra said in a statement. “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”

Experian vowed to defend itself and called the lawsuit “another example of irresponsible overreach by the CFPB.”

“Despite our constructive engagement and long track record of working alongside the CFPB to ensure consumers can easily dispute potentially inaccurate information, the CFPB chose to file a lawsuit with no communication, and no response to our outstanding communications with them,” the Costa Mesa, Calif.-based unit said in a statement.

The Fair Credit Reporting Act requires consumer credit reporting companies to do a complete investigation of any customer disputes.

Customers can submit disputes to Experian and other credit reporting companies—such as Equifax Inc. and TransUnion—online, over the phone, and via electronic submissions. The CFPB alleges Experian didn’t properly send information provided by customers disputing an item on their credit report to data furnishers and in many instances coded disputes in a way that didn’t properly convey the nature of the dispute.

Experian also didn’t have processes in place to identify disputes that had already been resolved, resulting in incorrect information being placed on credit reports, the CFPB said.

The agency also cited Experian for failing to provide consumers with adequate written responses to disputes.

The CFPB previously fined Experian $3 million in 2017 for allegedly deceiving consumers about the use of its credit scores by lenders.

The case is CFPB v. Experian Info. Sols. Inc., C.D. Cal., No. 8:25-cv-00024, complaint filed 1/7/25.