Experian is not a U.S. company and why you should care

Last week, I ate lunch with a financial expert whose company provides consumers with information on how to maintain good credit.  He’s quite a knowledgeable guy and keeps up, for the most part, with the latest financial news and government regulation, as they relate to consumer credit.  So, when I brought to his attention that Experian, one of the three major credit reporting bureaus, is not a U.S. company, he was shocked.  From that point, our conversation focused on Experian. 

Before I explain how Experian’s foreign status can possibly affect consumers in the U.S., I first must give a little background information on the company.  And by the way, all the information I am sharing is in the company’s annual report or publicly available. 

Experian is a European company with headquarters in Dublin, Ireland.  It also has offices in London, Nottingham, and Costa Mesa, California U.S.A.  From a global perspective, Experian is much more powerful than Equifax, the most relevant credit bureau in the U.S.  To give you a better perspective of how large Experian is compared to Equifax, let’s compare the two companies’ market capitalization, a measure by which we can classify a company’s size or how much it is worth.  Experian’s market capitalization is about $4.5 billion and Equifax’s is $2.8 billion. 

Logistically, it makes more sense for a company that plans to do business on a global scale to use Experian for its credit reporting bureau.  Likewise, it makes sense for a company that wants to outmaneuver some domestic regulation.  For example, here in the U.S., erroneous derogatory marks on a customer’s credit report must be removed according to the federal Fair Credit Reporting Act (FCRA).  However, that act applies here in the U.S., not necessarily overseas where a company can store that data for future reference.   

Furthermore, Experian is the deceptive company behind the domain and marketing ploy FreeCreditReport.com, a service that is not free.  Visitors to the web site are required to enroll in Experian’s Triple Advantage product in order to receive a “free” report.  The Federal Trade Commission (FTC) has since put out commercials that warn consumers that the only true web site for a free credit report is AnnualCreditReport.com.   Florida’s attorney general, Charlie Crist, has filed a civil suit against Experian for its deceptive ads. 

In short, it seems like more regulation is the simple solution to help protect consumers from corporate deception, but the problem gets even more complicated when foreign companies are introduced to the problem. 

Comments

[Alex]

Corporate deception is all about profits, like everything else corporate. Americans are married to consumption until debt do us apart.

[alex]

Thanks for sharing. It is useful for me.

[Greg Howard]

All of us as consumers and Americans have a real Champion with Florida’s Attorney general, Charlie Crist, He is the same man who ordered a full investigation into terrible child abuse at the Dozier School for Boys in Florida and now will file suit against Experian for its deceptive ads. FreeCreditReport is a Scam of the most blatant order. How arrogant of them to think they would get away with deflecting consumers from AnnualCreditReport.com.
Support the Consumer's Bill of Rights and maybe encourage
Charlie Crist to run for Senator from Florida. I live in Massachusetts but I'd send him a donation.

Greg Howard

[Carole]

I agree, Sharon. I got a letter saying that my interest rate was going up because evidently HSBC is not making any money. They said it had nothing to do with my payment history, etc (which is pristine, btw...I've never been late, gone over my limit, nada). I told them to close the account and I'm now paying it off at the interest rate I had. They wanted to hike me up to 22%. How on earth are people supposed to pay these things off with these percentages? My WaMu was 12% and was raised to 21.99%. I'm paying that one off first, then will deal with HSBC. I recently joined a credit union where their VISA is 9.9%. So once I get all this paid off, I'll apply for their card. This is insane!

I'm waiting to see what happens at the hearing later today!

[Sharon Barlow]

My husband and I agree that the best option for us is to have no debt. That's a real "duh" and unfortunately for us isn't going to happen anytime soon. We are not adding any debt but there is plenty from the past. I'm amazed at how much information is coming out about the complexity of the problem. And how even well informed people can let info slip by them. I wish there were more regulations that made it possible for consumers to pay off debt in a responsible way.