On January 3, 2023, the Consumer Financial Protection Bureau (CFPB) issued its annual report of credit and consumer reporting complaints. The report contains a thorough analysis of how the nationwide consumer reporting agencies (NCRAs) responded to consumer complaints in 2022. The 2021 report highlighted how the volume of credit and consumer reporting complaints had increased over the past three years; this trend continued in 2022. After examining over 488,000 complaints that the CFPB sent to the NCRAs, the CFPB found several major NCRA tendencies when responding to complaints and areas in which market participants and policy makers should tailor their priorities.

NCRA Responses

  • The number of complaints with prior disputes reported by each NCRA differs substantially. The CFPB found that a likely explanation for the discrepancy is the NCRAs’ failure to accurately respond to disputes.
  • Consumers are receiving more substantive responses. In 2020 and 2021, most complaints received either third party responses or the NCRAs referred the complaints to a dispute channel. In 2022, most complaints received substantive responses specific to the complaint. During the period of time where third-party screening was more prevalent, NCRAs reported giving relief in 14% of complaints, whereas in the less prevalent third-party screening period, NCRAs reported giving relief in over 56% of complaints.
  • Most NCRA responses state the outcome of the consumers’ complaints.
  • NCRAs are providing increased rates of relief (mostly non-monetary relief in the form of changing a consumer’s credit report).

Market Participants and Policy Makers’ Prioritization

In 2020 and 2021, two out of the three NCRAs decreased their number of staff responsible for responding to CFPB complaints and disputes. With an increase in automation in 2022, the CFPB advised market participants and policy makers to prioritize the following:

  • Assessing whether automation is problematically shifting the burden to consumers and away from companies. The CFPB found that NCRAs, consumer reporting agencies (CRAs), and furnishers have evaded their investigatory obligations by mandating that consumers submit specific information with a dispute before the market participant will investigate.
  • Reevaluating current systems to adapt to technological advancements. For example, with machines like ChatGPT generating human-like letters, current systems face challenges deciphering whether a complaint is issued by a person or machine.
  • Determining alternatives to the current credit reporting system that would give consumers more control over their data. For example, several economies are shifting towards creating bank rules that give consumers the power to control their individual data.

While tailored towards NCRAs, the 2022 annual report sheds light on the ways the CFPB is seeking to regulate and analyze consumer complaints and disputes. All CRAs should consider this information when analyzing their own practices and procedures for responding to complaints and disputes.