Business Blog
Taking a closer look at the small business credit reporting system
If small business is the engine that powers the American economy, business-to-business transactions are the gears that keep it running. But just as an error on a credit report can throw an unexpected wrench into the works for an individual consumer, an error on a small business credit report can bring even a well-designed business plan to a grinding halt. The FTC just launched an inquiry into the small business credit reporting system and has some questions for five companies in that industry: Dun & Bradstreet, Experian Information Solutions, Equifax, Ansonia Credit Data, and Creditsafe USA.
The Fair Credit Reporting Act gives consumers the right to challenge inaccuracies in their reports. But there’s no corresponding federal law that specifically outlines the processes and protections available to businesses when it comes to credit reporting. That can spell big trouble for a small business if a supplier denies them credit or a potential B2B customer declines to work with them based on erroneous information in a report. That’s why the FTC is using its authority under Section 6(b) of the FTC Act to issue orders for information from major players in the industry. Among the questions we’re asking are:
- How do they gather information for business credit reports?
- What kind of algorithms, machine learning, or other automated systems do they use in relation to business credit report data?
- What steps do they take to ensure that information in business credit reports is accurate and current?
- How do they address a business’ assertion that information in its report is incorrect or obsolete?
- How do they market their reports to different entities in the business ecosystem?
- What services do they offer to businesses to monitor or enhance their credit reports?
This isn’t the FTC’s first look at the business credit reporting system. Last year the FTC sued Dun & Bradstreet for making big bucks off small businesses by deceptively claiming its products would help businesses improve their reports. The truth, says the FTC, was that those products often didn’t help. What’s more, the complaint alleged Dun & Bradstreet failed to give small businesses a clear, consistent, and reliable process to fix errors on their reports. Among other things, the settlement in that case required Dun & Bradstreet to put procedures in place to make it easier for businesses to ensure information in their reports is correct.
The just-announced 6(b) orders reflect a broader fact-finding look into the industry. The companies will have 90 days to respond.
There is no process available for small businesses to report credit issues to these 5 companies unless we pay for a subscription.
Thank you for initiating a system of accountability with these companies that have so much power of a small businesses ability to get credit and maintain our business. We are not afforded the same luxuries of large entities.
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I welcome this inquiry, remembering years of D&B solicitations peppering my small business with warnings to manage our rating with pricey for-fee programs - or face the consequences of their data reporting to customers and suppliers. Compliance usually meant providing them your company's most intimate financial information routinely with no address of how they would use it. It was never an even playing field for small business and their recommendations didn't reflect the differences in evaluating credit risk between small and large concerns. Thank you, FTC.
Authorized users on credit cards get impacted by points based on a credit card they have NO responsibility for.... the same goes for being an authorized user on a company issued credit card, but the banks refuse to report authorized users on the business side. THIS IS UNFAIR advantage for business men to hide personal credit and maintian a high credit score, and poor people have to pay higher interest an d insurance.
I wish the Commercial credit reporting had more oversight. Especially with regard to who can be Comercial data furnishers. I have had serious issue with DUN and Bradstreet refusing to acknowledge my business as legit. However when they want my money they acknowledge it. I paid over $35,000 in taxes last year to the IRS and am in Good standing with the State of Florida AND Because I have a home office and a VOIP not listed in 411 directories etc DNB says I am now legit and can not have other businesses self report their tradelines with me or vice versa. I have to no end attempted to reason with DNB and just get ignored and flat out told i am not a real company to "their" standards. I mean That is not right especially after they were sanctioned for nefarious activity and still have not enacted all the sanctions that were ordered on them by the FTC. They admit to using of 26% of data they take in daily, in my opinion they are the frauds and should be ordered to be more accepting of modern companies and how they are set up and do business. DNB and how they operate is unacceptable and they continue to take advantage of small business owners and know they can get away with it. Please help also to note Experian, Equifax and creditsafe are only slightly better.
Self employed for years. Recently I applied for business wireless service with Verizon. We were providing our own paid Iphones. There was no credit requested just simple wireless service. After signing the contract I recieved a derogatory letter from Verizon / Dun & Bradstreet stating that I wouldn't be given credit for 7 months on the wireless accout and other harmful statements the reason reflected "proof of bankruptcy filing". That filing was 26 years ago after a divorce and had nothing to do with business or wireless service. I have excellent credit now. This well exceeds the 10 year lookback. This violates the law and I am in the process of filing complaints.