Experian, Orange, CA, will implement a data usage policy that requires subscribers, who have not been reporting complete customer account information in an attempt to gain a competitive edge, to fully report that data.
The lack of data has negatively affected 25% of the consumers named in the Experian database who are deemed higher risks as a result of the withheld information, an Experian spokesman said yesterday.
The policy–which affects both credit data and prescreening–takes effect July 1 and allows time for non-compliant subscribers to bring their reporting policies up to the new standard.
By omitting specific types of information, such as peak balance and credit limits, some subscribers are allegedly attempting to protect good customer databases by limiting competitors’ ability to identify and capture new customers. In addition, the omissions compromise consumer’s ability to secure appropriate offers of credit at lower interest rates, Tony Jones, Experian’s vice president of sales and service said in a statement.
The omissions were first noted about a year ago and coincided with an increase in competition where credit card granters and subscribers to the Experian database decided to withhold information rather than open up their databases to poaching, the spokesman said.
To enforce the policy, quarterly audits will be conducted and action taken against those in noncompliance. No specific actions have been decided and all will be handled on a case-by-case basis, the spokesman said.
The new policy comes on the heels of extensive research that revealed the omissions of data. Experian polled banks, credit card lenders, retailers, finance companies and sub-prime lenders to determine their position on the practice of withholding data from the national credit reporting bureaus.
“Experian began its research of this issue even before it caught the attention of the Federal Financial Institutions Examination Council, the Comptroller of the Currency, and the American Financial Services Association,” Jones said. “As an industry leader, we knew it was important to develop a meaningful and enforceable policy which combined the interests of businesses and consumers.”
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