Update: Credit Industry Reform

An update on the National Consumer Assistance Plan

On March 8, 2015, Equifax, Experian and TransUnion (CRAs) entered into a settlement agreement with the NY Attorney General along with 31 additional AGs from other states. Upon entering the agreement, the CRAs announced that they would address a number of credit reporting industry problems, including their dispute process and how they handle unpaid medical debt. This agreement is referred to as the National Consumer Assistance Plan.

The credit reporting industry overhaul is taking place nationally over the course of three plus years with 2018 as the deadline to have all changes made. The overhaul will be implemented in three phases (detailed below) to allow the CRAs to update their IT systems and procedures with data furnishers.

To date, changes to websites and other technical tasks have been acomplished. A change to be implemented this September will address the dispute process. The CRAs will be using trained and empowered employees to review the documentation accompanying disputes. And, if a furnisher says its information is correct, the credit reporting agencies must still look into it and resolve the dispute. 

In addition, the credit reporting overhaul will require CRAs to wait 180 days before adding any medical debt to your credit report. This time period is designed to make up for the lag time that is created by insurance companies as they tend to be slower when making payments.  

Ohio AG, Mike DeWine stated: "This settlement requires the credit reporting agencies to do a better, more careful job to produce more accurate credit reports, and to be much more responsive when consumers call to correct their mistakes".  

"The Implementation Schedule sets forth three phases of implementation, including scheduled dates by which each phase will be completed, as follows:

  1. Phase 1: The CRAs shall complete the tasks in Phase 1 within six (6) months of the Effective Date.

  2. Phase 2: The CRAs shall complete the tasks in Phase 2 within eighteen (18) months of the Effective Date.

  3. Phase 3: The CRAs shall complete the tasks in Phase 3 by the Completion Date.

The provisions of the Agreement in Section III shall be implemented in the following Phases, per Section II of the Agreement. The descriptions set forth here are summaries of the various initiatives to be implemented by the CRAs. Please refer to the Agreement for the full terms and scope of each initiative summarized here.

Phase 1 Initiatives

  • Section III.A.2 (announce retirement of Metro 1 data reporting format).
  • Section III.A.4.b (inform furnishers of date of birth reporting requirement for newly opened accounts).
  • Section III.B.1.a–b (eliminate conditions for accepting disputes).
  • Section III.B.4.b (evaluate consumer dispute analytics).
  • Section III.B.6.b (analyze data on consumer disputes available through e-OSCAR).
  • Section III.B.7.a (implement procedures to identify and process disputes for escalated handling).
  • Section III.B.8.a (Supporting Dispute Documentation review by CRAs).
  • Section III.C.2 (Promoting AnnualCreditReport.com on CRAs’ landing webpages)
  • Section III.D (develop and begin rollout of the PSA Campaign).
  • Section III.E.1–3 (National Credit Reporting Working Group on furnisher monitoring).

Phase 2 Initiatives

  • Section III.A.1.a–d (various Collection Furnisher initiatives).
  • Section III.A.3.b. (instruct Collection Furnishers on the use of the Metro 2 comment codes for “paid by insurance” and “being paid by insurance”).
  • Section III.A.5.a (Illegal Lender identification initiative).
  • Section III.B.3.a (various initiatives relating to the sharing of, obligations upon receipt of, and reporting of Disputed Deceased Indicators).
  • Section III.B.3.b (various initiatives relating to the sharing of, obligations upon receipt of, and education to consumers regarding Death Notices and other information relating to deceased consumers).
  • Section III.B.3.c.iii (develop guidelines and procedures for communicating with consumers about mixed files and create educational content about mixed files generally).
  • Section III.B.5 (provide consumer right to request one additional free annual credit report disclosure during the twelve-month period following a change to the consumer’s file).
  • Section III.B.6.a (update terms of use agreed to by furnishers using e-OSCAR, as well as the ACDV and AUD certifications made by furnishers through e-OSCAR).
  • Section III.B.7.d (update CRAs’ websites and AnnualCreditReport.com with educational material regarding disputes that qualify for escalated handling).
  • Section III.C.1.a (initiatives relating to enhancing the consumer experience on AnnualCreditReport.com).
  • Section III.C.1.b (various initiatives relating to enhancing CRAs’ websites and AnnualCreditReport.com with educational material for consumers regarding the dispute process).
  • Section III.E.4.b (Working Group review of CRAs’ policies and procedures pertaining to data accuracy and furnishers in order to identify potential best practices).

Phase 3 Initiatives

  • Section III.A.1.e (additional Collection Furnisher initiatives).
  • Section III.A.2 (migrate to Metro 2 data reporting format for all furnishers; no longer accept Metro 1 data reporting format).
  • Section III.A.3.a, 3.c (medical debt collection initiatives relating to preventing the reporting of and potential suppression of certain medical debt data).
  • Section III.A.4.a (prohibit furnishers from reporting authorized users without a date of birth for new accounts).
  • Section III.A.5.b (additional Illegal Lender initiative).
  • Section III.A.6–7 (establish new standards regarding indicative information and public records).
  • Section III.B.2 (initiative relating to Repeat Disputes)".