One of a number of punitive measures the company has taken in the waning days of the Biden administration, Experian, one of the world’s largest funds departments, was sued by the Consumer Financial Protection Bureau on Tuesday for allegedly handling client problems incorrectly, which could lead to lower credit scores.
In a national lawsuit, the Costa Mesa-based company was accused of failing to properly evaluate consumer disputes with creditors and of violating another Fair Credit Reporting Act regulations, which resulted in wrong details being included in consumer credit reports.
Radar conducted fake studies rather than effectively reviewing the problems as required by federal law, according to CFPB Director Rohit Chopra in a speech. It is crucial that credit reporting companies follow the law because” credit reporting issues can have serious effects for a family’s finances.”
The , complaint seeks an injunction , barring any more violations of the law, confiscation of ill-gotten gains, reparation to compensate consumers and pecuniary penalties. Radar denied the claims.
The petition has no validity at all. It is a further instance of reckless meddling by the CFPB and goes against historic regulatory and judicial precedent. Our constitutional position is powerful, we will fight it vigorously, and we are assured that we will prevail. We do not believe this to have any material effect on our company”, the organization said in a statement.
The organization has filed a number of complaints in recent months alleging different violations of buyer protection laws, which has drawn the attention of Republicans. The coming Trump presidency might not want to bring the case.
On Monday, the company sued Vanderbilt Mortgage &, Finance, owned by Warren Buffett’s Berkshire Hathaway, accusing it of setting people up to fail when they borrowed money to buy a made home. It filed a lawsuit against Walmart and another business next month for allegedly opening loan balances for more than 1 million vehicles without permission. JPMorgan Chase, Bank of America, and Wells Fargo were sued for allegedly allowing , unregulated scams on the Zelle repayment game. The organizations have denied the claims.
Experian, a company of Experian limited, a data and analytics firm headquartered in Dublin, is one of the world’s three largest credit departments along with Equifax and Transunion. The bureaus sell credit data to businesses that might be considering offering customers a work, loan, housing, or other solutions after collecting it from banks, credit card companies, and bill collectors.
The lawsuit alleges that Experian uses a flawed use procedure that frequently does not properly record the nature of a customer dispute and provides misleading information to the company that submitted a negative item on a credit record. These items may include supposedly late payments or debt discharges.
In addition, the problem asserts that Experian “uncritically” accepts the reaction of whatever object has filed the document when the reaction is “improbable or arbitrary on its face” or when the credit bureau has conflicting information. When a consumer is aware that they have filed for bankruptcy, which stops the credit bureau from recouping their debts, consider this.
Additionally, the credit bureau is accused of permitting the reinsertion of previously deleted negative information into a consumer’s credit report.
In April, the CFPB , released the results  , of an examination into the credit reporting industry that it said found accuracy problems, including a failure by credit bureaus to correct false or fraudulent information sent to them. According to Experien, the lawsuit involved issues that the industry and the agency had been” collectively discussing.”
The CFPB chose to file a lawsuit without receiving any responses despite our constructive interactions with them and our long history of working with the CFPB to ensure consumers could quickly dispute potentially false information, according to the statement.
The lawsuit was welcomed by the National Consumer Law Center, who argued that Experian is not the only credit bureau that has caused harm to consumers. A credit bureau should be held accountable for their purposefully biased and inadequate dispute resolution processes, according to Chi Chi Wu, a senior attorney for the consumer group, in a statement.
Republicans who want to rein in the CFPB have long targeted it, accusing it of heavy-handed actions that stifle economic growth. The CFPB was established in 2011 in the wake of the financial crisis. The first Donald Trump administration revised proposed regulations to tighten them for payday lenders. Consumer advocates considered the final regulations , watered down.
Elon Musk, the billionaire who is spearheading a campaign to streamline the federal government through the ‘ Department of Government Efficiency, or DOGE ), wants to abolish the organization. In a , November post on X , he said,” Delete CFPB. There are” too many duplicative regulatory bodies”
However, the agency scored a big victory earlier this year when the Supreme Court , turned down an effort , by a payday lending trade group to declare the bureau’s structure unconstitutional because it is funded by bank fees instead of congressional appropriations.
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