The nation’s three largest credit bureaus will be paying more than $7.1 million to the state of Mississippi to settle charges they failed to verify information about consumer debts that appeared on consumers’ credit reports and allowed erroneous information to remain on credit reports, damaging the credit prospects of numerous consumers.
Mississippi Attorney General Jim Hood announced the settlement, in which Equifax, TransUnion and Experian have agreed to overhaul their business practices and offer Mississippians unlimited access to free credit reports over the next three years. The settlement follows an investigation begun in 2013.
The three agencies will pay the state a total of $7.175 million. Starting in November, Mississippi residents will be eligible to receive unlimited free credit reports for three years and one free FICO credit score every year for three years, in addition to other benefits (a complete list is available at http://bit.ly/2eprCLk).
“There are few documents more important than credit reports to borrowers, students, homeowners, tenants, job candidates and service members,” Hood said. “Unfortunately, these corporations put their business interests ahead of the best interests of Mississippians. These corporations were too busy making money and listing debt that they didn’t bother to take the time to delete errors or verify whether the debts were correct. Even worse, consumers had to fight tooth and nail to get these significant errors corrected. When Mississippi families were denied loans due to these errors and omissions, it was almost impossible for them to get a live person on the phone. When they finally reached a live person, it was even more difficult to get the errors or omissions corrected on just one credit report, much less the other two.”
Hood’s investigation started after his office began getting numerous consumer complaints about credit report errors and difficulty in correcting those errors. Of particular concern were errors in the reporting of information related to public records — such as civil judgments and tax liens. In many instances, the agencies were attributing one person’s public record to another person. They also failed to update public records information when a civil judgment, for example, had been paid or dismissed.
In addition, the agencies had no procedure in place to comply with a Mississippi law that extinguishes certain debts after three years. The agencies were routinely including extinguished debts in credit reports for Mississippians.
The attorney general also discovered that Experian and TransUnion were engaging in deceptive marketing and sale of subscription credit monitoring services. Many Mississippians — lured by the promise of a “$1 credit report” or “free credit score” — were automatically enrolled in an expensive monthly credit monitoring service they did not want and did not know about.
“Over the last three years, we have worked to end these problems and ensure that none of these practices will be allowed to continue in Mississippi,” Hood said. “I encourage consumers to take advantage of the services being offered by the agencies, such as the free, unlimited access to credit reports. Knowing your credit score and understanding your credit report helps protect you against errors, and it can be valuable in making important financial decisions.”
Equifax will launch an education initiative in Mississippi, called “Feel Good About Credit,” to educate consumers about credit and help them improve their financial lives, while TransUnion will promote the free benefits to consumers through print, digital radio and social media advertisements.
Other actions covered under the settlement include:
- Requiring agencies to conduct annual reviews of debt collectors with high dispute rates.
- Requiring them to stop reporting on civil judgments and liens against Mississippi consumers and to purge existing records (unless the agencies can “develop standards to protect against errors in public records reporting).
- Development of new procedures to accurately report on debts that have been “extinguished” under Mississippi law.
- Ensuring that bankruptcies are accurately reported.
Hood noted that many Mississippians will be receiving an email in the next few days from inquiries@MississippiCreditReportSettlement.com to let them know how they can receive free, unlimited credit reports and annual free FICO scores.