Menendez, Warren, Schatz Reveal CFPB Received More than 20,000 Consumer Complaints following Equifax Breach

Menendez, Warren, Schatz Reveal CFPB Received More than 20,000 Consumer Complaints following Equifax Breach

Senators Press Mulvaney for Robust Investigation into Equifax; Question Why He Wants to Hide Public Complaint Information First Comprehensive Review of CFPB Data Shows Near-Doubling of Complaints after Breach

   

NEWARK, N.J. – U.S. Senators Bob Menendez (D-N.J.), Elizabeth Warren (D-Mass.), and Brian Schatz (D-Hawaii), members of the Senate Banking Committee, today unveiled the first comprehensive review of consumer complaints in the wake of the 2017 Equifax breach. Their report found that in the six months following the breach, the Consumer Financial Protection Bureau (CFPB) received more than 20,000 complaints from consumers about the impact of the breach, problems with Equifax’s response, or other issues with the company. The number of complaints about Equifax nearly doubled after the breach. 

The senators sent their report to Acting CFPB Director Leandra English and Office of Management and Budget (OMB) Director Mick Mulvaney, and pressed them to hold Equifax accountable and protect consumers from future data security breaches. The senators also asked that Mr. Mulvaney abandon his plans—revealed last week to a room full of bankers—to hide certain CFPB consumer complaint data from the public.

Months after the Equifax breach, consumers are still facing a myriad of problems and continue to seek assistance from the CFPB. The CFPB received almost twice as many complaints in the six months after the breach was announced than in the six months prior. The 21,921 complaints about Equifax include more than 7,000 complaints about the improper use of a credit report after the breach, more than 7,000 complaints about incorrect information on a credit report, more than 3,000 complaints about Equifax’s inadequate assistance in resolving the problems after the breach, and more than 1,500 complaints about Equifax’s credit monitoring services, fraud alerts, security freezes, and other identity theft protections.

“Today’s report confirms our worst fears—that the breadth and depth of the Equifax breach has had and continues to have a devastating impact on the financial well-being of millions of Americans,” said Sen. Menendez. “That’s why we need strong legislation that holds consumer reporting agencies accountable for data breaches, and requires them to offer free credit freezes and free assistance to affected consumers.  In addition, we must continue to fight efforts by this Administration to defang our consumer financial watchdog. American consumers need a CFPB that will look out for them and hold big corporations like Equifax to account.”

“Consumers are asking the CFPB for help about Equifax nearly twice as often as they did before the recent data breach—but Mick Mulvaney wants to make it easier for big financial institutions to get away with cheating people,” said Sen. Warren. “Instead of using the CFPB to coddle credit reporting agencies and hide financial misconduct from the public, Mr. Mulvaney needs to let the Bureau do its job and protect the 145 million Americans harmed by this massive breach.”

“This sheer number of complaints we found makes the case for the Consumer Financial Protection Bureau to act aggressively to hold Equifax accountable,” said Sen. Schatz. “Because of Equifax’s mistakes, people have lost jobs. They’ve lost access to their finances. They’ve been given the runaround when they tried to ask for help. These are the kinds of problems the Bureau was created to fix, but we are not seeing the kind of action you would expect from the Consumer Financial Protection Bureau. That needs to change, immediately.”

Despite the severe threat to consumers and the CFPB’s responsibility to protect them, the investigation into Equifax has reportedly “sputtered" since Mr. Mulvaney took over the CFPB. While the CFPB has confirmed that an inquiry is still open, reports indicate that the agency, under Mulvaney's watch, has not sought subpoenas or testimony from Equifax executives. Reports also suggest that the CFPB “rebuffed” bank regulators’ offer to help with on-site exams of credit bureaus despite former Director Cordray (link) making it clear that this cooperation was necessary and welcome.

In the letter accompanying the report, the senators raised concerns about reports that at an American Bankers Association summit, Mr. Mulvaney indicated that he would soon order that key parts of the CFPB complaints database be kept secret and unavailable to the public.  The senators wrote that, without this information, researchers and advocates would lose the ability to track in real time the difficulties consumers are facing. Companies would have a harder time conducting due diligence on potential partners to make sure they don’t cheat their customers.  Other federal and state regulators may lose access to this important information, making it more difficult for them to identify systemic fraud.  Most importantly, removing this information would take away crucial information consumers need in order to make informed decisions about who to trust—information that is even more important in an era when the consumer watchdog is controlled by Mr. Mulvaney, who has acted quickly to limit CFPB actions to protect consumers.

This report highlights why the CFPB must continue a full investigation into the Equifax breach—but the U.S. Congress also has a responsibility to rein in abuses by credit reporting agencies: 

  • Sen. Menendez’s Consumer Data Protection Act would hold credit reporting agencies accountable for data breaches and incentivizes better data security practices while at the same time providing affected consumers with tools to protect themselves.
  • Sens. Menendez, Warren and Schatz also introduced the FREE Act which would prohibits credit bureaus from selling data to third parties when a credit freeze is in effect.
  • The SECURE Act, introduced by Sens. Warren and Schatz in September 2017, would make it easier for consumers to dispute and correct errors in their credit reports. The senators’ report found more than 7,000 consumers filed complaints over incorrect information on their Equifax reports.
  • The Data Breach Prevention and Compensation Act of 2018, introduced by Sens. Warren and Mark Warner (D-Va.) in January, would require the FTC to promulgate cybersecurity standards for credit reporting agencies and would impose strict penalties on companies that fail to adequately protect consumer data.

During a Banking Committee hearing earlier this month, Sen. Menendez grilled Mulvaney on the CFPB’s lax enforcement under his watch.  In February, he was among a group of 31 senators in demanding answers to reports that CFPB halted its investigation into how Equifax failed to protect the personal data of over 145 million Americans. 

Sen. Menendez led the call for Senate hearings into the Equifax breach, urged a top-to-bottom review of all three major credit reporting agencies, and joined a bipartisan group of 34 senators calling for investigations by the Securities and Exchange Commission (SEC), Department of Justice (DOJ) and Federal Trade Commission (FTC) into stock sales and potential insider trading.

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