By Dean Seal

Experian faces a government lawsuit alleging it fails to properly investigate consumer disputes, leading to credit-reporting errors.

The Consumer Financial Protection Bureau sued the credit-reporting firm on Tuesday for alleged violations of the Fair Credit Reporting Act. The agency claims Experian doesn't do enough to intake, process, investigate and notify consumers about disputes, causing the inclusion of incorrect information on consumer reports.

"Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law," CFPB Director Rohit Chopra said.

A representative for Experian said the lawsuit is without merit.

"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 company said.

According to the CFPB, Experian uses faulty intake procedures that fail to properly address consumer disputes. It also sends notices to consumers that fail to inform them of investigation results, instead providing them with ambiguous or inconsistent information, the agency said.

Experian is also responsible for inaccurate information being reinserted into consumer reports because it lacks the basic tools needed to match newly reported information with records of previously deleted information, the CFPB claims.

The consumer watchdog is seeking fines, disgorgement of ill-gotten gains and an order for Experian to stop its alleged misconduct and pay redress to harmed consumers, the CFPB said.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

January 07, 2025 15:22 ET (20:22 GMT)

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