Sen. McCaskill contradicts Pratt: “I can’t believe you’re clogged up from the credit repair agencies.”
Stuart Pratt, head of the Consumer Data Industry Association, which represents credit reporting firms said it’s credit repair businesses that account for 17-20% of incoming volume with repetitive letters and eventually an item may be deleted. (Recently, before the Senate Banking Committee Pratt said credit repair volume accounted for 40%.) Chairman McCaskill contradicted Pratt saying “I can’t believe you’re clogged up from the credit repair agencies, because all you do is convert it to a two or three digit code and you send it to the lender…”, concluding the bigger problem is the follow-through between the bureaus and data furnishers in investigating the disputes to ensure accuracy.
McCaskill remarked that three out of five senators in the hearing discussed inaccurate items found on their own credit reports. “You are not well served by saying you don’t have a problem. You have a big problem.” McCaskill told Pratt. She said it appears the credit bureaus are not going to fix the problems until they are monetarily punished.
Sen. Klobuchar said she sees there is a “market” for credit repair organizations, and it’s important to enable it to serve consumers and not expose them to bad actors.
In its statement to the committee, National Association of Credit Services Organizations, the leading trade association for the credit repair industry, which actively advocates legal compliance, consumer and industry education, ethical practices, and consumer fairness in the credit repair process expressed support for the Senate probe of credit reporting stating: “credit report inaccuracies can have a devastating effect on consumers. The FTC’s FACT reports to Congress have acknowledged that many consumers need expert assistance to navigate the process of obtaining an accurate credit report. As credible credit repair companies have become established and benefitted the marketplace, consumer complaints regarding credit repair have plummeted over the past few years, to where credit repair was not within the top 60 product/service subcategories attracting consumer complaints.”
NACSO stated that the regulatory environment must be in a manner that does not “eradicate legitimate credit repair companies and then leave consumers exposed to the dishonest, poorly organized and unlawful credit repair scams that will fill the void of legitimate professionals to assist them.” Further, NACSO stated credit repair services assisting consumers who desire the help in analyzing credit reports and following up with credit bureaus, debt collectors, or medical billing services are part of the much-needed solution for hard working American consumers.