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That is the desire to update accurate information as of the date reported, but which the consumer wishes could be even more current due, perhaps, to a very recent payment made to a particular lender. As discussed earlier in our testimony, the consumer's desire to have information updated immediately is real, though an update of accurate information is not a reflection of inaccuracies in the files of consumers. Rather it is a reflection of the needs, in particular, of the mortgage lending community.

Data Set 3 - Review of Mortgage Reports

CDIA worked with members to develop a sample set of data that is derived from the marketplace and not based solely on a consumer's review of the file, as is the case with the first two data sets above. We picked the mortgage lending process since this is a lending decision which still involves a good deal of contact between the consumer, the lending institution or mortgage broker, and the specialized CDIA members which produce mortgage reports.

Mortgage reports most commonly include data from all three of the nationwide credit reporting systems. CDIA's mortgage reporting members provide a range of services to mortgage lenders, including re-verifying information that may be accurate as of the date reported, but which needs to be updated to a more current status, or adding additional information that was not present in any of the three reports ordered from the nationwide credit reporting systems. Clearly CDIA's reseller members provide valuable services for the mortgage lending community and for consumers.

These data were gathered over a two-week period and, while some files were updated by the mortgage reporting services to a more current status, via direct contact with the providers of information, only one percent (1%) of the files have an error. Further, it is not clear from this review that the one percent of files that did contain an error, contained one that was consequential to the lending decision.

Size of Sample

Number of reports that were accurate based on
direct contact with the original provider of the
information, but which needed an update of

189 Three-File Merged Reports Reviewed 61 (32%)

Note that rate of dispute was not tracked but the rate of contact was. Thus, 100,000 consumers reviewed their files and only ten percent ever decided to even make an additional phone call.

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Note that 189 three-file merged reports equates to 567 individual reports from the three nationwide consumer credit reporting systems.

Several of our members indicated that updates of accurate information may include the need to show a new balance due to a recent payment made by the consumer, or adding data which is missing from the file according to the consumer.

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Accuracy - Can we learn more from the nature of disputes, themselves?


Now let's step back to the larger population of consumers who order and review their files to try to understand the reasons for which they may contact a consumer reporting agency and also the nature of the disputes they submit. At the macro level, out of 16 million file disclosures1o issued to consumers every year, preliminary data indicates that likely just over 8 million consumers review their files and, though they have access to toll-free numbers and live personnel, they do not call back at all.

For those who do call back, many call in with questions and not necessarily disputes. Some of our members estimate that in a given month, what might be described as educational calls where a dispute has not been submitted can comprise as much as fifty percent (50%) of all contacts in any given month. As described above in our testimony, consumers' perceptions about how a divorce decree should work or when a payment should be reported to the consumer reporting agency can drive phone calls that ultimately don't end up in a dispute of any sort being submitted.


Out of the two billion consumer reports sold each year, eight tenths of one percent (.8%) ever order their file.

When it comes to the term "dispute" we believe we need to frame up some guiding thoughts on the difference between a dispute about a true inaccuracy and a dispute which is really associated with updating a file which has accurate information as of the date reported. The acknowledged difficulty of measuring “accuracy” via dispute rates is illustrated by the many reasons we've already discussed for which consumers may request changes in their files where the information was, in fact, accurate as of the date reported, or where they don't recall having opened an account, or where they misunderstand the law. Below for the sake of brevity are just some of the examples of disputes of accurate information as previously discussed:

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An item that is accurate as of the date reported and the consumer is actually seeking to update information between the regular reporting cycle of thirty days An item that is disputed as a result of credit repair activity wherein the credit repair agency might be disputing all accurate but negative information in the file with the goal of having some or all of the information deleted.

An account that a consumer doesn't recognize because it has been inactive for an extended period of years, or because the name of the owner of the account is different than the retailer with whom the consumer did business.

An item which is accurate, but which conflicts with a divorce decree, wrongly abrogating a consumer's obligation to pay.

Data Set 4 - Industry-Wide Disclosures to Consumers and Dispute Responses to
Disputes Submitted

The following are industry-wide data from CDIA's nationwide consumer credit reporting system members. CDIA believes several points are necessary to put the following data in a reasonable context:

1. A dispute does not equate to an acknowledgement of inaccuracy as previously stated.

2. The percentage indicated below cannot be used to infer an estimated rate of inaccuracies in files since many disputes are not related to inaccuracy per se, but rather to a desire to “update” information outside of the regular cycle of thirty days used by most data furnishers.

3. The data below be used to determine the consequence of a particular dispute relative to the consumer's estimated risk. A valid dispute about an item of information such as a consumer's middle initial will result in a change to the consumer's file, but won't have any bearing on credit risk.

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To provide context for the results of the disputes in the chart above, and to lay out a better understanding of the nature of disputes and to identify which disputes are most common we gathered the following data. Consistent with our discussion above and particularly our points about expectations for immediacy, confusion with regard to divorce and those focused on various consumer perceptions, it is not useful to consider all disputes as being associated with an inaccuracy. Following are the top disputes that our members receive and which reflect the

preponderance of all disputes submitted. This listing is not in perfect rank order since there are variances in the dispute patterns between companies:

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11 Our members consistently estimate that the number of disputes submitted by credit repair agencies/clinics is as high as one-third of all disputes submitted. Credit repair agencies, according to the FTC, are notorious for submitting false claims of inaccuracies with the sole intention of deleting accurate information off of credit files. 12 Note that this percentage does not relate to the total number of file disclosures issued. A majority of file disclosures do not result in any type of dispute.

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It is difficult to draw full conclusions from the data above since only eight-tenths of one percent (0.8%) of all consumer reports sold result in consumers ordering a file disclosure. Preliminary data indicates that of those who do order a file, fully four-tenths of one percent (0.4%) of all files sold result in consumers deciding that no further contact was needed. We have presented other data that shows that where consumers are likely order files for a reason other than adverse action, (see Data Sets 1 and 2) the contact rate is very low with a range of ninety percent (90%) to ninety five percent (95%) not choosing to contact the consumer reporting agency after reviewing the file. Based on these data sets, it is possible to surmise that perhaps consumers who order files due to an adverse action have a higher likelihood of calling, at least to ask a question, which explains why the aggregate rate of contact for all file disclosures is higher. These 8 million consumers also equate to four-tenths of one percent of all files sold (0.4%). You can see by the results of these consumers, who may be submitting disputes, that fully 46% of the disputes come back with the information verified as reported (see Data Set 4). The marketplace data we presented in Data Set 3, where 567 files used for lending decisions were reviewed, one percent of the files contained an inaccuracy.

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