Credit Repair Complaints vs Credit Reporting Complaints by the Numbers

WASHINGTON - March 31, 2016 - PRLog -- The Credit Repair Organizations Act or CROA was drafted in 1996 with the assistance of the big three credit reporting agencies; TransUnion, Equifax and Experian. CROA implemented consumer protections in the effort to stop bad actors in the credit repair industry. Due to these bad actors and negative publicity, credit repair has received much scrutiny. For many of the past 20 years, the perception of credit repair has been less than savory.

Consumers trying to repair their credit rating can be vulnerable to claims of quick fixes, special tactics, connections with the credit bureaus, guaranteed credit 700 credit scores in 30 days and other deceptive statements that may sway them to pay fees for services that the company simply could not provide.

It is true, there have been bad actors that make such claims. In reality, I am certain in some circles it still happens today. That being said, thanks to the efforts of compliant credit service organizations and the National Association of Credit Organizations or NACSO, credit repair is evolving from a perceived scam to a very legitimate industry and much needed service for consumers.

To highlight this evolution, I want to cite some very telling data that outlines consumer complaints nationally. The Consumer Sentinel Network Report is an annual report that is compiled by the Federal Trade Association or FTC. The Sentinel Report is a compilation of consumer complaints filed through the Better Business Bureau, State Attorney Generals Offices, Departments of Commerce, FTC as well as the Consumer Financial Protection Bureau or CFPB.


The report breaks down consumer complaints by category, total count and percentages overall. This format allows regulators and legislators to view the complaints against various industries and assess the need for potential investigations and or interventions. Credit repair has a historically low complaint rate when compared to the other credit services like pay day loans and debt settlement. Unfortunately for many years, credit repair complaints have been combined with these services, unfairly landing credit repair in the top ten complaint categories overall.

Thankfully, through the efforts of NACSO and its advocates, credit repair now stands in its own category and the numbers are very telling. Below is a snapshot from the 2015 Sentinel Report that highlights credit repair complaints nationally from 2013-2015.

As you see, 2015 marks a 3 year low at a time when our credit report is more vital than ever. Only 1751 complaints were filed across the entire nation. The overall percentage is .06% of all consumer complaints filed.

These statistics clearly demonstrate that credit repair is not a nefarious practice. It shows that it is a legitimate service and most operating in the industry understand and respect the responsibility of providing credit services to consumers.

Why is this important now more than ever? As I write this, the big three are working to become exempt from CROA, the very law they helped create. The Bureaus want the unfettered ability to provide credit repair services without being held to the same consumer protections credit repair organizations are required to uphold.

On the surface you may say this is a great idea. They have all the information and are large corporations.

They can be trusted to have the consumer's best interests in mind. Well let me share the 2015 Sentinel Report Data on credit reporting agencies complaints.

Since 2013 credit bureau complaints have increased by 13,700 and account for 1.4% of all complaints filed nationally. At a time when the bureaus are claiming to be working for consumers and making sweeping changes to their systems, I would like to believe that complaints would be leveling off if not decreasing.

I will concede that it is a massive undertaking managing the incredible amount of data that the credit reporting agencies manage. It is a great responsibility that most will never comprehend. That being said, it is a responsibility that is extremely profitable. As small credit service organizations, we must manage complying with consumer protections like; no advanced fee payment and giving our clients the right to cancel within 3 days for any reason and receive a full refund. There is no reason the bureaus cannot comply with these same rules.

In closing, it is the opinion of NACSO that consumers deserve these protections of CROA and no matter how large the organization or position in the marketplace, there should be no entity that is exempt from this law, especially those that assisted in its creation.