What do credit Reference Agencies do to Investigate Information on your Credit Report?

credit reference agency investigationsCredit reference agencies are here to help, and claim to “investigate” any information you report to them as incorrect. The video below from Experian who are the largest UK credit reference agency is very simple to understand, but it is also important to know what credit reference agencies actually do to investigate the information when you dispute it.

An investigation makes you believe they will investigate it, right? Wrong! This is misleading as there is no real “investigation” that takes place if you dispute something such as a mysterious default on your file.


What The Credit Reference Agencies Investigation Involves:

From our research the agency asks the lender or company who has reported the information if it’s correct.  If the company says YES, that’s it case closed, investigation over!

See how the term “investigate” is misleading?

No real investigation has taken place. If the police investigate a murder and have a prime suspect, if they ask him “did you do it?” and he says “no”, is that it?

The agencies believe that marking the information as unreliable is sufficient to protect themselves from claims, including those for compensation. But it is NOT. The marker they place is swiftly removed shortly after they are told it’s correct by the lender, no proof, no further questions. The Information Commissioners Office also makes it very clear this action is not sufficient to protect credit reference agencies from claims, yet they still don’t do anymore.

So what do they do?

In essence they just take the lenders work over yours and investigate nothing. You then have the arduous task of battling with the company who reported the information to get it put right. This really isn’t easy, and can take Months or in some cases Years to even get a reply. Mistakes happen and not everyone is honest, not even in the credit and finance industry… ever heard of a dodgy banker?

This “investigation” is no such thing and credit reference agencies need to make it clearer that what they do is:

  1. Just ask the company who reported the data
  2. Close the case.
  3. Remove the “dispute marker”

Both Experian and Equifax have almost the exact procedure.

Any dispute is all heavily weighed in the businesses favor despite experian’s comments that:

“Experian believes that there is a natural and important balance of interests between the needs of people, businesses and the credit industry in this process, and we’re committed to ensuring that the balance is maintained. We make every effort to keep people’s’ needs in balance with the needs of businesses.”

Some respect must go to experian for making information more accessible than equifax, but it’s mostly just sales talk and business spiel on their website, when you look for actual “information” it doesn’t exist or is impossible to find.

Credit reference agencies are a business, they exist to make a profit and that IS the bottom line. Do they really care about an individuals credit report? Or are the more interested in making money from your £14.99 a Month, and by charging companies to look at your file before making credit decisions?

Why Credit Reference Agency Disputes are Unfair to Customers

unfair information on credit filesCredit reference agencies like experian and equifax claim to help us as customers dispute any information they see as ‘wrong” on the credit files which they hold. This process involves us raising a dispute, the credit reference agency then queries the information with the lender on our behalf.

While that’s all very well and good it really isn’t enough!! Our latest dealing with both of these credit reference giants has shown a serious flaw in the way the dispute the information on our behalf, and yet refuse to remove it.

Example of the poor disputes process by experian and equifax

Recently a customer of experian’s credit expert and of equifax who pays their £14.99 charges every Month to be a member with all it’s alleged benefits had a default registered on their credit file, by a company they had never heard of. She raised a dispute with both companies, and both asked the lender to see of the information was correct.

The company whom reported the default stated the information was correct and should remain on file. The credit reference agencies told the customer the information was correct, and wouldn’t be removed, they also advised them to contact the lender, or in this case debt buying company!

The customer contacted the company (a debt purchaser) who had to go back to the original lender to get proof of the debt, so the agencies had no proof when they disputed the info, and either did the company who reported the default!

The debt buyers didn’t have any paperwork, agreements, contracts or applications in relation to this alleged account until almost 3 Months after the credit reference agencies “took their word for it” and refused to remove the default.

So at the time the credit reference agencies refused to remove the derogatory information and were told it was correct, the company that reported the default didn’t have proof it even existed and had to ask elsewhere, so how did they know it was real? How could the credit reference agencies just accept their word against a customers?

This shows a blatant disregard for customers of the credit reference agencies. Although lenders sign up to the credit reference agencies terms and conditions, and are supposed to report accurate information, it’s obvious they are NOT, and the agencies just accept it.

Experian claim to make over 350 DETAILED CHECKS and invest Millions of pounds every Year to do everything they can, to ensure the information is accurate and up to date.

The only check they appear to do when info is disputed is ask someone else, who doesn’t even know themselves!

At this time the information is still on the customers report, the paperwork the debt buyer has provided is a disgrace and is being reported to action fraud. The person in question had also issued a court claim to the debt purchaser, and has issued letters before action to the credit reference agencies and will be taking court action for compensation for failing in their duty, defamation, and most likely libel depending on solicitors advice in the coming few days.

Experian & Equifax Failing to Protect Customers, In Cahoots with Lenders and DCAs?

Experian and Equifax are the 2 largest credit reference agencies. Our latest contact with both these companies over some disputed information leads us to believe they have a total disregard for their customers (who pay them Monthly for the privilege of using their service) and it would appear to me at least, that they are either in collusion with lenders and debt collection companies, or at the very least side with them and ignore any facts when the accuracy of the data they hold is challenged.

The above statement and title about being in collusion is a bit strong, and possibly incorrect? But they really don’t seem to be doing enough to check the information is correct when it’s disputed. Is it just a big boys club with secret handshakes? Or are they here to help when you do see information that’s incorrect?

The customer says it’s wrong, the lender or collection agency says it’s right, so it stays on file, how is that fair if no one “investigates” it to see if it really is correct?

Here is a perfect example of disputed information and NO help from the credit reference agencies, no “investigation” just taking a debt buyers word for it!

We raised a dispute over a default which was placed on a customers file in November 2013 yet backdated to March 2013. For clarification Merligen are a debt buying company, and the original “loan” this refers to was with shoppercheck whom never reported the account at all.

The information commissioners office has a set of technical guidelines in regard to filing defaults for lenders and has information specifically for credit reference agencies to follow. Apparently Experian and Equifax seem to think they don’t have to adhere to these guidelines, and can pretty much do whatever they wish.

Whats The Information Commissioners Office Says:

“Records where the accuracy is challenged can be marked as ‘under query’. This marker alone is unlikely to be sufficient to provide protection against claims, including those for compensation. Agencies should therefore ask the lender to substantiate the disputed information within a reasonable time frame, for example, 28 days, and, if the lender is unable to substantiate the disputed information in that time, should suppress the information from the file.”

The above paragraph seems very easy to understand. The credit reference agency should ask for proof from the lender, if they don’t get it, they should remove the default within a reasonable time frame.

Equifax’s Reply when asked to “substantiate the information” as under these guidelines.

“Dear xxxx

Thank you for getting in touch.

Merligen Investments Ltd has investigated your query and have told Equifax that the information is correct and should remain unchanged.

Response received states: ‘Your account was brought by Merligen Investment Ltd from Shopacheck on the 21-06-2013.’

This information is supplied by the company and we can’t change it without their permission. You should get in touch with the company directly if you need more information.

Website www.merligen.com

The note that we added, stating that your information was in dispute will be removed within 24 hours.

You’ll find more information about your credit report at: www.equifax.co.uk/help. If you have a question, you should find the answer in our FAQ section. If not, you can send us an online query, and attach your documents to it – no need to worry about them getting lost or delayed in the post.

I hope you find this useful. If there’s anything else we can do for you, please let us know.

Kind regards

Equifax Customer Services”

This seems to be a complete fob off, a standard reply but with a quote they received from merligen, is that the proof they need to keep this on file? A lack of due diligence by equifax in regard to the information. Basically they asked Merligen if it was correct, Merligen said YES, equifax said ok. What has that done to substantiate the disputed information?

We of course reopened the dispute and stated the guidelines laid out by the ICO for credit reference agencies which according to equifax, they don’t have to listen to anyway their reply to that is below:

“I note your comments about the quoted sections from the Information Commissioner’s Office default guidelines; however, the notice of dispute process used by Equifax and the other credit reference agencies has been created in conjunction with the Information Commissioner’s Office and has been accepted by them as being in line with the Data Protection Act and any other relevant guidelines. The dispute process asks the supplying organisation to investigate the accuracy of the information they have supplied to Equifax. This process is considered sufficient to ensure compliance with these guidelines and does not require the company to provide documentary evidence in support of the dispute response.”

At this point I will say that Merligen cannot have investigated the account, We know they did not at that time have any paperwork for account in question, so equifax just take their word for it. Does that seem fair?

Experian’s Reply to the Same Disputed Information:

Experian were just as disappointing if not more so when it came to raising the dispute. At the time of writing I am still waiting for a further response but it made me feel quite sick to the stomach when we got the below reply from experian:

“All of our clients sign up to strict terms and conditions which stipulate that they must only provide us with information that is compliant with the Data Protection Act 1998.

Companies are also aware that if they do not comply with the relevant legislation this could threaten their licence to trade so it is not in their best interests to supply data to us that is inaccurate.

We have asked Merligen to provide further clarification to their response and they have advised the following:

“This account is not settled, it has an outstanding balance of £665.40. Miss XXXXX needs to contact Moriarty Law on 0845 218 2021 who are acting on our behalf to set up a payment plan.”

We are unable to arbitrate in a dispute between yourself and Merligen Investments.”

So Experian asked Merligen to provide further clarification, and they have provided no proof just quoted an outstanding balance, and a telephone number for a law firm to set up a payment plan on a debt that doesn’t exist. That is simply not acceptable, not impartial, and would appear to be proof of the lenders / debt buyers / collection companies / credit reference agencies and all in this together!

Experian should NOT have passed that information with telephone number on to a customer. It could easily be seen as advice from the so called “credit expert” service, and would have been the entirely wrong thing to contact anyone about this disputed debt.

A further email from Experian after asking how they “investigate” or “substantiate” the information the lender has provided when it’s disputed by the customer reveled the truth

“Because the lenders agree to our terms and conditions of providing us with accurate information, if we query information on a credit report and the lender comes back to advise the information is correct then we accept the lenders decision as it is not in the lenders interest to provide us with inaccurate information.”

So all lenders, debt buying companies, and debt collection agencies all tell the truth, and never make a mistake? We can already prove that Merligen themselves had no paperwork for the account when we asked for it to be queried,  so how can experian take their word for it, if they have no clue themselves?

What we are doing next to sort out this default marker

We have now filed a complaint with the ICO about the credit reference agencies and merligen. We have issued a County Court Claim to have the default removed and claim compensation from Merligen. The same Court action will be taken against the credit reference agencies unless the ICO steps in and sorts out the whole situation.

With Merligen themselves they did send “proof” of the account to us after Months of asking, they stated they have just received the information from the original lender in late February 2014 (so how did they know it was real?) copies of the documents they have sent are below.

I must add the account holder does say she possibly did have a shoppercheck account in the past, but if she did this is certainly NOT it. This account has missed payments for almost 3 Years giving us a lot of ammunition to have the default removed/amended.

The customer used to live in an area where the homes were targeted by these door stop lenders at times of the Year most likely to temp people into borrowing. Before and just after Christmas, Easter, Summer and before kids go back to school. All times when it’s likely people are struggling to make end meet!

There is blank information on the “application for credit” including a blank amount applied for, and no signatures on the credit agreement form by either the customer or anyone from Shoppercheck, we do suspect a bit of fraud with this one!

Below is the unsigned agreement they provided as proof of the account.

unsigned shoppercheck credit agreement


Experian on Dispatches, A Surprisingly Professional Response, More Could Have Been Covered

Many will have watch the Dispatches investigation on Channel 4 while they went undercover in the UK’s largest credit reference agency, Experian.

It’s caused a bit of a stir but to be honest the claims dispatches made were not really worthy of the program and a lot more could have been covered. Experian handled the situation quite well by putting a human face to the response, something that’s very rare! The answers were a little standard and nothing you wouldn’t expect, BUT it took 18 Months for experian to apologise to Rosalind Canning, a customer of “credit expert” who had incorrect information on their account.

First things first Experian is a good service, it allows us to see whats held on our credit files, and see what lenders see, this is very valuable information. The scale of the operation is huge, and the amount of data collected, stored, and shared is beyond all comprehension.

Complaints are very low compared to the sheer number of customers experian has, but they need to make some changes to ensure the data is correct when challenged. It’s all very well telling people to contact the lender but when you get no reply, that negative information stays on your report, is doing real damage and isn’t acceptable.

Many people are annoyed that they even exist, but how else can lenders know who is creditworthy, and who isn’t?

Why Experian is an Essential Asset to Consumers and Companies

If a total stranger walked up to you and asked to lend £1000 would you give him it? NO!

If it was someone you knew and trusted the situation is very different?

If it was someone who was vouched for by a very close friend you would be better armed to consider it, correct?

That’s really all Experian do is show your past history to potential lenders so they can make an informed decision. Every time you pay your bills on time, pay your credit card, clear some off the mortgage, those are all people vouching for you as a creditworthy person and someone who can be trusted, and this information is gathered together in one place to make life simpler.

The opposite is also very true, miss a payment on your store card can be damaging, miss quite a few and default and that’s a red flag to potential lenders but like it or not the system works. As long as the information on your file is correct then you really don’t have much to get upset about, if the information is incorrect you need to get it changed, mistakes can and do happen.

What we Absolutely Hate about Experian, and What CAN be Done Better?

The checks they need to do to ensure the information is correct. It’s just not good enough.

They say that it’s the lenders responsibility to ensure the information provided to them is correct, this is fine and the way it should be. BUT, when that information has been disputed by a customer they need to check its accuracy for themselves and not side with the lenders and accept what they say is the truth, it’s our experience that the opposite is true and the late payments, defaults or ccjs are incorrect in some way and no one wants to do anything about it.

Not all lenders are created equal: Some are great, understanding and will apologize for an error. Others are just acting in illegal ways, using underhand tactics to gain advantage over a consumer, and it’s unfair and unjustified.

Credit reference agencies need to be more accountable for their action when information is disputed, they seem to thing they are untouchable and pass everything off to those who have sent them the information, this has to change and will change at some point I’m certain of it, but most likely not until it’s challenged in court which may not be as far away as some may think.