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The federal consumer watchdog sent a stiff warning Thursday to several undisclosed specialty consumer reporting companies that failed to make it easy for consumers to obtain a copy of their consumer reports.
The Consumer Financial Protection Bureau also put the industry on notice, emphasizing that federal law requires that these reports be readily accessible and free at a consumer's request.
Consumer reports contain specific data on financial behaviors consumers engage in, such as check-writing, medical payments, insurance claims, rental history or employment. Specialty consumer reporting agencies gather that information and sell it to third parties such as landlords, employers and insurance companies. These companies are part of the larger consumer reporting industry that also includes the three national credit reporting agencies: Experian, Equifax and TransUnion.
CFPB Director Richard Cordray said in a statement that these specialty consumer reports affect insurance premiums, the ability to rent an apartment and, in some cases, employment. He reiterated that the agency will take action against companies that don't comply with the law. The agency has already levied fines against Discover, American Express and Capital One for bad practices, and would probably do the same against noncompliant consumer reporting agencies.
"This is a pretty stern warning," says John Ulzheimer, president of consumer education at SmartCredit.com. "Given what the CFPB has done to some of the major credit card issuers, the industry should take it seriously. He's not kidding."
Under the Fair Credit Reporting Act, a consumer can request a free copy of these specialty consumer reports every 12 months, just like their credit reports from the major credit reporting agencies. The process shouldn't be burdensome, even if it's seldom used, Ulzheimer says.
"Just because you don't have a boat load of people asking for these reports doesn't mean you can't follow the law," he says.
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