My co-blogger, Professor Jeff Sovern, has published another insightful op-ed in the New York Times. This piece, entitled, To Catch a Creditor, considers why credit report errors persist and what should be done about it. Professor Sovern and his co-author, Ira Rheingold of the National Association of Consumer Advocates, suggest that
[w]hile federal law requires credit bureaus to conduct a reasonable investigation of consumer complaints, the marketplace can penalize credit bureaus that investigate too aggressively. Credit bureaus are heavily dependent on lenders for both revenue and the information the bureaus package and sell; if a credit bureau presses a lender too hard, the lender could patronize a different bureau and withhold data about its customers.
In contrast, consumers have little power over credit-reporting agencies. Consumers cannot, for example, block credit bureaus from obtaining information about their transactions.
Consequently, credit bureaus have every reason to favor lenders’ interests when investigating complaints.
The full op-ed can be found on page A27 in the paper edition of the New York Times and online here: http://www.nytimes.com/2013/07/11/opinion/to-catch-a-creditor.html?emc=tnt&tntemail0=y&_r=0.