McCaskill Holds Hearing On 'Kafkaesque' Credit Report System [View all]

Millions of consumers have an error on their credit report. In response, Democratic Senator Claire McCaskill of Missouri held a hearing Tuesday on the consumer report industry.

One out of every five consumers has an error on at least one of their major credit reports, according to a study released a few months ago by the Federal Trade Commission. Those errors can cause consumers to pay more or be denied credit or housing.

McCaskill, who recently became chairman of the Senate subcommittee on consumer protection, called the system “kafkaesque.”

“What happened in many of these instances is the consumer comes forward and says, ‘You’ve got an error,’ and all you do is put it into a two digit code," McCaskill said. "I can’t believe you’re so clogged up because all you do is put it into a two or three digit code and send it to the lender, the lender says ‘No’ and you say ‘Okay.’”

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