Some of you fans of comedian John Oliver may have seen his recent ranting about the credit reporting industry. Indeed, Mr. Oliver’s commentary is hysterical, and he draws some rather wild comparisons. But beyond the entertainment is some rather startling information and facts about the industry, where it is today, and how it affects us.
Mr. Oliver pointed out some rather important facts and how surprised we may be at how many aspects of our lives can be affected by credit reporting agencies. Banks, employers, insurers, land lords, and credit card companies all rely on reports before providing consumers what they request. In the employment world, 47% of all employers rely in some way on consumer reports for making employment decisions. In addition, the CFPB has reported that 52% of all debt on credit reports come from medical expenses.
But the humor kicks in when he discusses the error rate. One in 4 credit reports have an error of some sort, and 1 in every 20 has something seriously wrong in the report. He points out how unacceptable this is by saying “if every 20th frosty from Wendy’s was (CENSORED) we’d want accountability and we’d want it fast.” So true. If something is seriously wrong, it can prevent one from getting credit or even a job. 1 in 20 people suffering a loss through no fault of their own are not good numbers. Mr. Oliver pointed to a release put out by the credit bureaus that stated that 95% of consumers are unaffected by errors on their credit reports. Seems like a great feat, but Mr. Oliver begs to differ. Given the vast number of people this actually affects, this is not a statistic to be proud of. There are 200 million people out there with credit files. The remaining 5% amounts to 10 million people – which equals the entire population of Sweden! So the entire population of a country can be harmed by credit report errors.
Mr. Oliver also points out that in one instance Trans Union was tracking people for being terrorists. “I do hope we have a better strategy for dealing with terrorists than flagging their credit report so they cannot get that dream apartment.” Again, funny point. But lets look at that 1 in 20 number again. If one of those seriously wrong items on a credit report was flagging an innocent person as a terrorist, that person is doomed. Yet the credit bureaus tend to put the blame on the creditors or the companies that furnish the information to the credit bureaus. Mr. Oliver makes a great point here: If you are going to blame the furnishers and rely on their data, then clearly the dispute process needs to be better. Yet here at SmithMarco, we are still seeing plenty of cases where the dispute process utterly failed to correct a glaring error.
Mr. Oliver also had a great discussion regarding employment background reporting. He points out the there is no knowledge out there about exactly how many companies are out there in the business of selling background reports. “You can’t lose track of how many background reporting companies there are the way we lost track of Oreo Cookie flavors!” Funny, but a real concern nonetheless. There are a stunning amount of errors in background reports, the industry should have a grip on who is in the business. So in the end, Mr. Oliver put his small staff through a background check. Five of them had errors on it, and one of them came up as matched with someone convicted of Medicare Fraud.
Imagine if he did not have the job yet….. Mr. Oliver’s full video can be seen here.
Contact SmithMarco, P.C. for a free case review if you are dealing with inaccuracies in your reports.