COLUMBUS, Ohio and WASHINGTON, D.C. -

Ohio attorney general Mike DeWine and 30 other state attorneys general reached a settlement this week with the three main credit reporting agencies — Equifax, Experian and TransUnion — which have agreed to make a number of changes to their business practices.

Enforcement officials recapped that DeWine initiated a multistate investigation in 2012 that focused on consumer disputes about credit report errors, monitoring and disciplining data furnishers (providers of credit reporting information), accuracy in consumer credit reports and the marketing of credit monitoring products to consumers who call the credit reporting agencies to dispute information on their credit report.

Under the settlement, officials said the credit reporting agencies have agreed to increase monitoring of data furnishers, to require additional information from furnishers of certain types of data, to limit direct-to-consumer marketing, to provide greater protections for consumers who dispute information on their credit reports, to limit certain information that can be added to a credit report, to provide additional consumer education, and to comply with state and federal laws, including the Fair Credit Reporting Act.

“Today is a good day for all consumers,” DeWine said. “We are announcing a comprehensive multistate settlement that will help protect consumers from credit reports that are wrong, out of date, or even mixed up with someone else’s report, and it will reduce the chance that a consumer is wrongly denied a house loan, a car loan, or even a job, because of an inaccurate credit report.

“This settlement requires the credit reporting agencies to do a better, more careful job, to produce more accurate credit reports, and to be much more responsive when consumers call to correct their mistakes,” DeWine continued.

In reacting to this week’s settlement, Stuart Pratt, president and chief executive officer of the Consumer Data Industry Association, referenced back to how Equifax, Experian, and TransUnion created the National Consumer Assistance Plan back in March. Pratt emphasized that strategy was geared to enhance their ability to collect accurate consumer information and to provide consumers with a better experience in interacting with the national credit reporting agencies about their credit reports.

“That plan, which arose out of collaborative discussions between the three agencies and a group of state attorneys general and the attorney general of New York, will enhance credit report accuracy, increase transparency, and provide meaningful benefits to consumers,” Pratt said.

“Those benefits, which will be rolled out nationwide, stand as an example of what can be achieved when private industry and government officials work together,” he went on to say.

In agreement to this week’s settlement, Pratt emphasized that Equifax, Experian, and TransUnion “have been in compliance with federal and state law, but as we showed in launching the National Consumer Assistance Plan, we do not hesitate to make improvements beyond what the law requires when doing so will benefit consumers.

“With the exception of the financial payments the credit reporting agencies are making to the attorneys general to cover the costs of their investigations, consumer education and other purposes, the settlement essentially adopts the plan announced with the New York attorney general,” he continued.

Pratt pointed out that what’s been described as “the most recent comprehensive government study” showed that credit reports are “materially accurate” 98 percent of the time.

“But our goal is always to improve beyond even that high standard of accuracy, and we will continue to look for ways to make further enhancements, as we have done several times in recent years,” Pratt said.

More Details of Latest Settlement

Key provisions of the settlement — what officials called an assurance of voluntary compliance — include:

— The credit reporting agencies must maintain information about problem data furnishers and provide a list of those furnishers to the states upon request.

— The credit reporting agencies and data furnishers must use a better, more detailed system to share data.

— The credit reporting agencies cannot market credit monitoring services to a consumer during a dispute phone call until the dispute portion of the call has ended.

— The credit reporting agencies must tell consumers that purchasing a product is not a requirement for disputing information on their credits reports.

— The credit reporting agencies must implement an escalated process for handling complicated disputes, such as those involving identity theft, fraud, or mixed files (in which one consumer’s information is mixed with another’s).

— Each credit reporting agency must notify the other agencies if it finds a mixed file.

— The credit reporting agencies must send a consumer’s supporting documents to the data furnisher. (The credit reporting agencies implemented this change after the attorneys general initiated their investigation and raised the concern that the pertinent complaint documents were not being sent to the furnishers.)

— Consumers may obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute.

— The credit reporting agencies are generally prohibited from adding information about fines and tickets to credit reports.

— The credit reporting agencies cannot place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency, which gives consumers time to work out issues with their insurance companies.

— The credit reporting agencies must require debt collectors to provide the original creditor’s name and information about the debt before the debt information can be added to a credit report.

— The credit reporting agencies must tell consumers how they can further dispute the outcome of an investigation into a dispute, such as by filing a complaint with other agencies.

— Each credit reporting agency must provide a link to its online dispute website on the website www.annualcreditreport.com, and the credit reporting agency’s dispute website must be free of ads and any marketing offers.

Officials explained the changes required under the settlement will be implemented in three phases to allow the credit reporting agencies to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date.

Participants & Ramifications of Settlement

Officials went on to mention a violation of the settlement by any of the credit reporting agencies can be enforced according to state law.

In Ohio, for example, a violation of an assurance of voluntary compliance is prima facie evidence of a violation of the state’s Consumer Sales Practices Act, meaning it would provide sufficient proof for the state to establish a case.

Under the settlements, the credit reporting agencies also will pay the participating states $6 million. As the lead state, Ohio will receive $459,912.80 under the settlement.

Participating in the settlement are the attorneys general from the states of Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont and Wisconsin.