New York Consumer Law Blog

Handing over your credit card to your teenager might not seem like a good idea.

But it might actually be a smart financial move. Not only can it help kids learn money management skills, it can also help their credit score.

Adding a child as an authorized user on a parent's credit card can give the child a boost when it comes to establishing a strong credit profile. That is, as long as the parents are in good credit standing.

What GAO Found

Identity theft services offer some benefits but have limitations.

• Credit monitoring helps detect new-account fraud (that is, the opening of new unauthorized accounts) by alerting users, but it does not prevent such fraud or address existing-account fraud, such as misuse of a stolen credit card number. Consumers have alternatives to credit monitoring, including requesting a low-cost credit freeze, which can prevent new-account fraud by restricting access to the consumers' credit report.

• Identity monitoring can alert consumers to misuse of certain personal information by monitoring sources such as public records or illicit websites, but its effectiveness in mitigating identity theft is unclear.

Wells Fargo is having a hard time getting Americans to sign up for credit cards these days.

Credit card applications at Wells Fargo plunged by 55% in February, the sharpest decline since the bank's fake account scandal erupted last September.

Another sign of trouble: Wells Fargo (Read more . . .

Held by Maryland’s Highest Court:

Midland Funding waived its right to arbitration when it sued Mr. Cain in small claims court.  Because Midland was unlicensed when they sued him, the judgment against him and all other class members is VOID.

(BOSTON) Today, the Consumer Financial Protection Bureau (CFPB) Read more . . .

The Consumer Financial Protection Bureau (CFPB) today took action against Experian and its subsidiaries for deceiving consumers about the use of credit scores it sold to consumers. Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. In fact, lenders did not use Experian’s scores to make those decisions. The CFPB ordered Experian to truthfully represent how its credit scores are used. Experian must also pay a civil penalty of $3 million.
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Equifax, Experian and TransUnion recently decided to remove tax-lien and civil-judgment data starting around July 1, according to the Consumer Data Industry Association, a trade group that represents them. The firms will do so if those data don’t include a complete list of at least three data points: a person’s name, address and either a social security number or date of birth.

Many liens and most judgments don’t include all three or four. This change will apply to new tax-lien and civil-judgment data that are added to credit reports as well as existing data on the reports. 

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Supervision’s work in the consumer reporting market is ongoing and remains a high priority. Consumer reporting companies and furnishers have an obligation to maintain the accuracy of consumer data, but experience indicates that they lack incentives and under-invest in accuracy. Indeed, these most recent supervisory findings underscore Supervision’s concern about the lack of resources that furnishers in particular have devoted to this important function and the resulting violations of law. We have targeted substantial resources to improve the accuracy of consumer information, and we will continue to do so. We have observed steady progress at consumer reporting companies to improve data governance.
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 You can also read Director Cordray’s full remarks on the report to the CFPB Consumer Advisory Board last week.

“Consumer reporting, also known as credit reporting, is an important market that for many years has not been very transparent and generally is not well understood by consumers. It is also one of the markets where people cannot vote with their feet by choosing another provider if they are dissatisfied, which means that industry incentives and practices are not always aligned with the interests of consumers.
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Bureau Report Outlines Accuracy and Other Issues That Bureau Supervision Has Taken Action to Address

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) released a report detailing the problems in the credit reporting industry that the Bureau has uncovered and corrected through its oversight work. Since launching its supervision of the credit reporting market, the CFPB has identified significant issues with the quality of the credit information being provided by furnishers and maintained by credit reporting companies.
Read more . . .