In a major victory for consumers, TransUnion has agreed to settle a class action lawsuit alleging that the company created and maintained “mixed files.”
Mixed files are credit reports that contain information about multiple individuals, which can lead to errors and identity theft.
The lawsuit was filed in 2017 by a class of consumers who alleged that TransUnion had violated the Fair Credit Reporting Act (FCRA) by creating mixed files.
The plaintiffs alleged that TransUnion created mixed files by failing to properly distinguish between individuals with similar names. This resulted in consumers being denied loans, jobs, and other opportunities because of inaccurate information on their credit reports.
In the settlement, TransUnion agreed to:
- Create a new process for identifying and resolving mixed files,
- Provide free credit monitoring to class members for two years, and
- Pay $13.9 million in restitution to class members.
The settlement is a huge victory for consumers harmed by TransUnion’s mixed files. It also sends a message to other credit bureaus that they must take steps to protect consumers from inaccurate and incomplete information on their credit reports.
The Severity of the Problem
Having mixed files can lead to serious consequences. According to a Consumer Financial Protection Bureau (CFPB) study, up to 25% of credit reports contain errors. Of those errors, about 10% are serious enough to cause consumers to be denied loans, jobs, or other opportunities.
Mixed files are a major source of these errors. When two or more individuals have similar names, it can be difficult for credit bureaus to keep their files separate.
This can lead to information from one individual being mistakenly included on the file of another individual.
The Impact on Consumers
The impact of mixed files can be devastating for consumers. It can be difficult to recover when consumers are denied loans or jobs because of inaccurate information on their credit reports.
They may have to pay higher interest rates on loans, or they may have to delay buying a home or a car. They may also have difficulty finding a job.
In some cases, the impact of mixed files can be even more serious. For example, consumers who are flagged as terrorists on their credit reports may have their U.S. government clearance revoked. This can make it difficult for them to get a job or to travel.
The TransUnion mixed files class action lawsuit is a reminder that credit bureaus must take steps to protect consumers from inaccurate and incomplete information on their credit reports.
The settlement sends a message to other credit bureaus that they must be held accountable for their mistakes.
Consumers can also take steps to protect themselves from mixed files. They should regularly review their credit reports for errors. If they find any errors, they should dispute them with the credit bureau so that their credit scores are accurately represented.
They should also be aware of the signs of identity theft, such as unauthorized charges on their credit reports or accounts that they did not open.
What You Can Do
If you believe your credit report contains inaccurate or incomplete information, you can dispute the report with the credit bureau. You can also contact the Consumer Financial Protection Bureau (CFPB) for assistance.
Here are some tips for disputing an inaccurate credit report:
- Write a letter to the credit bureau disputing the inaccurate information.
- Include your name, address, Social Security number, and the date of the report.
- State the specific information that you believe is inaccurate.
- Provide documentation to support your claim.
- Keep a copy of your letter and any supporting documentation.
The credit bureau has 30 days to investigate your dispute. If the credit bureau finds the information inaccurate, it must be removed from your report.
If the credit bureau does not remove the inaccurate information, you can file a complaint with the CFPB. The CFPB can investigate your complaint and take action against the credit bureau.
By taking these steps, you can protect yourself from the harmful effects of inaccurate and incomplete information on your credit report.