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FTC Survey: The Good And Bad Experiences Of Identity-Theft Victims With Consumer Reporting Agencies

The U.S. Federal Trade Commission (FTC) released the results of its survey of consumers who had reported to the FTC that they were identity-theft victims. The survey assesses consumers experiences with recovering from identity theft and contacting the national consumer reporting agencies (CRAs). The survey also assesses how consumers exercise their rights under the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACTA - 2003).

Overall findings:

  • 68% of survey respondents were somewhat or very satisfied with their overall experiences with the national consumer reporting agencies (e.g., Equifax, Experian, and TransUnion), but many consumers said it was difficult to reach a live person.
  • Less than half of the respondents were aware of most of their rights under FACTA before they contacted the consumer reporting agencies.
  • Few consumers exercise their right to block selected information in their credit reports from identity theft and fraud, since most consumers (78%) don't know about this right
  • Some respondents complained about feeling pressured to buy additional identity theft monitoring products when they called the consumer reporting agencies.

FACTA gave consumers the right to:

  • Pace Fraud Alerts on their credit file with the nationwide CRAs,
  • Request a free credit report from each of the three national CRAs when placing a fraud alert,
  • Block fraudulent information from appearing in their credit reports,
  • Receive a notice of these and other rights from the CRAs

When placing a fraud alert, consumer only need to contact one of the three national CRAs. After successfully placing a Fraud Alert on their credit file with one CRA, most of the time the other two CRAs will automatically add Fraud Alerts to the consumer's file on their systems. When requesting a Fraud Alert, consumers can also request a free copy of their credit report. Survey results about Fraud Alert and free credit report requests:

  • 44% of survey respondents were not aware before contacting a CRA of their right to place a Fraud Alert on their credit file. Despite this, 85% of respondents ultimately requested a Fraud Alert on their file.
  • When requesting a Fraud Alert, 58% of survey respondents reported that all three national CRAs placed alerts when requested. 36% of respondents were unsure what happened, and 6% reported that at least one CRA didn't place a Fraud Alert.
  • 44% of respondents who requested a Fraud Alert said they were very satisfied with the process, 32% said they were somewhat satisfied, and 17% said there were either somewhat or very dissatisfied with the process.
  • Most survey respondents (56%) requested their free credit report (when placing a Fraud Alert) by telephone, compared to the website (33%), and postal mail form (14%).
  • Most (51%) said that they received their free credit report from all CRAs they contacted, while 33% stated that they received it from only some of the CRAs they contacted. 11% said that they did not receive any credit reports.
  • 43% of respondents said that they were very satisfied with the process of requesting free credit reports after placing a fraud alert. 32% said that they were somewhat satisfied. 22% said that they were either somewhat or very dissatisfied.

Errors occur in credit reports, either from identity fraud or from honest mistakes by the CRA or lender. Consumers can dispute this erroneous data and demand that it be removed or corrected. Survey results about credit report accuracy:

  • Most survey respondents (60%) were aware before contacting a CRA that they had the right to challenge the accuracy of information on their credit report.
  • 36% of respondents who contacted a CRA disputed the accuracy of information on their credit report in connection with the identity theft that led to the contact. Of those who disputed information, 72% filed disputes with a CRA and while 46% contacted the creditor that provided the information to the CRA.
  • The types of credit report information disputed: 47% challenged identification and employment (47%), payments (48%) about a specific debt, and unauthorized lenders who obtained their credit report (40%).
  • Of survey respondents who disputed information in their credit reports, 52% said that the information was corrected or removed, 22% said that the information was not corrected, and 18% said that they were not sure what happened.
  • Of survey respondents who had information corrected by the CRA, 42% said that the error was corrected after a single contact. 27% said the error was corrected after two contacts. 24% said the correction required three to five contacts, and 4% said they contacted the CRA six or more times.
  • Of survey respondents who disputed information in their credit reports, most (57%) said that they were either very or somewhat satisfied with the process. 17% said that they were somewhat dissatisfied, and 21% said that they were very dissatisfied.

Consumers can block certain information within their credit reports that resulted from identity theft and fraud. Blocks are different from disputes. CRAs must respond within four (4) days after receiving a valid request to block certain data in a credit report. Survey results about blocking fraudulent information:

  • Of survey respondents who contacted a credit reporting agency, 78% were not aware of the right to block information in the credit file. Few survey respondents (21%) exercised this right to block the reporting of information resulting from identity theft.
  • Of those who requested that information be blocked, 46% said that all CRAs blocked the information. 18% said that some of the CRAs blocked the information, and 9% said that none of the agencies blocked the information.

The FTC concluded in its report (bold emphasis added):

"Despite the 68% general satisfaction rate with the CRAs, the survey reveals three areas where respondents faced difficulties in exercising their FACTA rights. First, one prominent complaint was the difficulty in reaching a representative at a CRA with whom to speak about identity theft. Many respondents said that it was difficult or impossible to move past the automated response system... Second, the survey results suggest that a relatively small number of identity theft victims are aware of their FACTA rights. Less than half of the respondents were aware of most of their rights prior to contacting the CRAs. Even for the most well-understood right – disputing inaccurate information – only 60% of respondents who contacted a CRA were aware of this right prior to contacting the CRA... Third, both the survey respondents and the focus groups raised concerns about the CRAs using consumer contacts about identity theft as an opportunity to sell identity theft protection products. Several respondents and focus group participants complained that they felt pressured to buy one or more products and that, in some cases, they received services that they did not want or need."

The FTC sent survey invitations to about 3,000 consumers who had previously reported to the FTC hotline that they were identity-theft victims. The survey questions were based on six focus groups conducted in 2009. 634 consumers responded. The FTC maintains the anonymity of all survey respondents. Download the FTC, Using FACTA Remedies Report (Adobe PDF - 4.9 M Bytes), which is also available here.

Want to learn more? Suggested readings about credit and CRAs:

Comments

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Hubert L. Fields

nice blog. all the information needed by a debtor are all found in this great article. the ways to improve credit score mentioned above can really help debtors like me.

grahamgoch

The people not reading your blogs are missing out a lot of quality contents.

George

Grahamgoch:

Thanks. And do share more specifically related to this or other blog posts.

George
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