On Thursday, May 28, Attorney General Ken Paxton announced a $6 million settlement with three national credit-reporting agencies.
According to a press release, the three agencies are Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC. The three have agreed to increase the accuracy of consumer credit reports.
“This settlement elevates standards placed on credit reporting agencies, which will provide greater protections for consumers in Texas and nationwide,” said Paxton. “A good credit rating is an increasingly important piece of people’s lives, and the results of this effort will give consumers greater assurance that their score is a fair and accurate reflection of their financial health.”
The settlement, approved by a Travis County District Court, was part of a 31 state effort in which the credit reporting agencies also agreed to pay the participating states $6 million and make a number of changes to their business practices to benefit consumers.
Initiated in 2012 by Ohio Attorney General Mike DeWine, the multistate investigation focused on consumer disputes regarding credit report errors, the monitoring and disciplining of credit report information providers, accuracy in consumer credit reports, and the marketing of credit monitoring products to consumers when they called credit reporting agencies to dispute their reports, the press release states.
Under the settlement, the credit reporting agencies will increase monitoring of data furnishers, require additional information from furnishers of certain types of data, limit direct-to-consumer marketing, provide greater protections for consumers who dispute information on their credit reports, limit certain information that can be added to a credit report, provide additional consumer education, and comply with state and federal laws, including the Fair Credit Reporting Act.
The changes required under the settlement will be implemented in three phases to allow the credit reporting agencies to update their IT systems and their procedures with data furnishers.
All changes must be completed within three years and 90 days following the settlement’s effective date.
In addition to Texas and Ohio, participating in the settlement are the attorneys general from the states of: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, and Wisconsin.