ATTORNEY GENERAL JIM HOOD ANNOUNCES THAT EXPERIAN, TRANSUNION, AND EQUIFAX WILL OVERHAUL CREDIT REPORTING PRACTICES, AND END DECEPTIVE MARKETING IN MISSISSIPPI
Attorney General Jim Hood announced today that the nation’s three major credit reporting agencies will overhaul their business practices and two of the agencies will offer Mississippians unlimited access to free credit reports over the next three years in order to resolve the Attorney General’s investigation into the agencies’ mistakes on credit reports and deceptive marketing activities. The agencies were accused of putting their own interests ahead of those of Mississippi consumers by failing to properly verify debts and failing to delete paid or expired debts from credit reports.
The credit reporting agencies, Experian, TransUnion, and Equifax will pay the state a total of $7.175 million. Starting in November, Mississippi residents will be eligible to receive unlimited free credit reports for three years, one free FICO credit score every year for three years, in addition to other benefits provided by the credit bureaus under terms of settlements with Attorney General Hood.
The three credit reporting agencies compile and sell credit reports on almost every Mississippi adult. The reports are the basis for determining whether and on what terms consumers are offered credit cards, student loans, auto loans, mortgages or rental housing. The information on the reports may impact the security clearance of a member of the military, or it may be the difference for employers in determining whether to offer someone a job.
“There are few documents more important than credit reports to borrowers, students, homeowners, tenants, job candidates and service members,” Attorney General Hood said. “Unfortunately, these corporations put their business interests ahead of the best interests of Mississippians. These corporations were too busy making money and listing debt that they didn’t bother to take the time to delete errors or verify whether the debts were correct. Even worse, consumers had to fight tooth and nail to get these significant errors corrected. When Mississippi families were denied loans due to these errors and omissions, it was almost impossible for them to get a live person on the phone. When they finally reached a live person, it was even more difficult to get the errors or omissions corrected on just one credit report, much less the other two.”
Attorney General Hood launched an extensive investigation into credit reporting practices in 2013 after his office received numerous consumer complaints about credit report errors and difficulty in correcting those errors. Of particular concern to Attorney General Hood were errors in the reporting of information related to public records—such as civil judgments and tax liens. In many instances, the agencies were attributing one person’s public record to another person. They also failed to update public records information when a civil judgment, for example, had been paid or dismissed.
In addition, the agencies had no procedure in place to comply with a Mississippi law that extinguishes certain debts after three years. The agencies were routinely including extinguished debts in credit reports for Mississippians.
The Attorney General also discovered that Experian and TransUnion were engaging in deceptive marketing and sale of subscription credit monitoring services. Many Mississippians—lured by the promise of a “$1 credit report” or “free credit score”—were automatically enrolled in an expensive monthly credit monitoring service that they did not want and did not know about.
“Over the last three years, we have worked to end these problems and ensure that none of these practices will be allowed to continue in Mississippi,” Attorney General Hood said. “I encourage consumers to take advantage of the services being offered by the agencies, such as the free, unlimited access to credit reports. Knowing your credit score and understanding your credit report helps protect you against errors, and it can be valuable in making important financial decisions.”
Equifax will launch an education initiative in Mississippi called “Feel Good About Credit,” to educate consumers about credit and help them improve their financial lives. The initiative will help empower consumers to be their financial best through advertising using emojis and an interactive quiz.
TransUnion will promote the free benefits to consumers through print, digital radio and social media advertisements. Attorney General Hood also advised Mississippians that many consumers will receive an email message from inquiries@MississippiCreditReportSettlement.com in the coming days announcing the consumer is entitled to sign up for and receive free, unlimited credit reports and annual free FICO scores. This email is not spam, but is a benefit obtained by the Attorney General for Mississippians.