US consumer watchdog sues Experian over consumer credit accuracy

(Reuters) -The top U.S. watchdog agency for consumer finance on Tuesday sued credit rating giant Experian (OTC:), saying the company failed American consumers who challenge the accuracy of consumer credit files, court records show.

Through a California subsidiary, the Ireland-based global data broker maintains crucial files on most American families but allegedly mishandles their complaints, damaging household finances in the process, the agency said in a statement.

Experian conducts “sham investigations” into consumer disputes and allows deleted false information to be reinserted into credit files, according to the CFPB.

“Credit reporting errors can have serious consequences for a family’s finances and it is critical that credit reporting giants follow the law,” CFPB Director Rohit Chopra said in a statement.

Experian said in a statement that the CFPB had disregarded the company’s efforts to engage constructively with the agency.

“The lawsuit is completely without merit,” the company said. “Our legal position is strong, we will defend it vigorously and are confident we will prevail.”

The complaint seeks a court order barring Experian from further misconduct and requiring the company to pay redress to harmed consumers, forfeit any resulting ill-gotten gains and pay a fine.