The nation's three largest credit reporting agencies have agreed to pay a total of $2.5 million to settle federal charges that they blocked millions of consumers from discussing the contents of their credit files and correcting possible errors.

The payments -- $1 million each by Experian (formerly known as TRW) and Trans Union, and $500,000 by Equifax -- are part of a settlement negotiated with the Federal Trade Commission to resolve charges that the three agencies violated the Fair Credit Reporting Act.

Based on the information they have in their files, the three repositories provide credit scores that are now used by most mortgage lenders use to determine whether potential buyers or refinancers qualify for a home loan.

The law is designed to promote accuracy, fairness and privacy of information in the files of every credit reporting agency.

But to give consumers the ability to more easily resolve inaccuracies in their records, Congress amended the statute in 1997 to require the "big three" to provide consumers who received a copy of their credit report with a toll-free telephone number at which personnel would be accessible to answers queries during normal business hours.

According to the FTC's charges, they never did.

While each established toll-free lines, the consumer agency said, they violated the accessibility requirement because a substantial number of callers have been unable to speak with real live people. In some cases, the agency said, some callers were kept on hold for unreasonably long periods.

"The reality is that consumers never got the access the law guarantees," said Jodie Bernstein, director of the agency's Bureau of Consumer Protection. "These cases demonstrate in no uncertain terms that it's time for Equifax, Experian and Trans Union to pick up the phone and meet their obligations to consumers."

The complaints against Chicago-based Trans Union and Experian of Orange, Calif., alleged that since the amendments went into effect in September 1997, more than a million callers heard a busy signal or a recorded message advising them to call back later because all representatives were busy.

The complaint against Equifax of Atlanta involves a similar allegation involving "hundreds of thousands" of callers.

But Equifax and Trans Union also were charged with blocking certain incoming calls based upon the location of the caller.

The settlement, which does not constitute an admission of guilt, also contains specific injunctive provisions that ensure the three agencies follow the rules.

They are required to maintain a blocked-call rate no greater than 10 percent and to keep their average hold-time to no more than 210 seconds.

Published: January 20, 2000

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.