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Errors in consumer credit reports emphasize need for fraud prevention

Feb 17, 2013 Walt Wojciechowski

Errors in consumer credit reports emphasize need for fraud prevention

Many Americans have found themselves near or below the subprime credit level in recent years, but were all of their scores legitimate? According to a recent Federal Trade Commission (FTC) study, an estimated 40 million Americans have received credit scores that included mistakes

"The problem is that it's not really within the power of the average person using this system to fix the mistakes," Steve Kroft, a "60 Minutes" correspondent, said during the telecast, according to CBS News. "You feel like you're up against this machine, and there's no way to break through."

The FTC study, which revealed that 5 percent of Americans found errors on one of their three reports, emphasizes the need for the credit reporting industry to improve its fraud prevention measures. A quarter of consumer credit reports had mistakes that could have affected the overall score, with 5 percent of those errors changing scores by more than 25 points. 

According to CBS News, 8 million people file credit report disputes every year, which is permitted under federal law. Rather than allowing these numbers to continue escalating, these companies may want to leverage fraud prevention technology that can help reduce these error rates.