2 Investigates: Mistakes by credit bureaus making consumers' lives nightmares

ATLANTA — Long before Equifax announced a mass data breach of its clients, Channel 2 Action News learned red flags were going up by consumers for years, resulting in thousands of lawsuit against the big three credit bureaus.

Credit reports hold the key to everything from locking in the best interest rate to getting a loan at all.

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Credit agencies such as Equifax collect an incredible amount of data from thousands of sources to build those reports.

But Channel 2 investigative reporter Aaron Diamant found the big three agencies are a growing target for lawsuits filed by consumers having a tough time clearing up critical errors.

"My name is Wesley Edward Streetman, and I am not dead."

That was something Ed Streetman never expected he'd have to say, let alone prove to embattled credit reporting giant Equifax.

"I didn't know how that they could have found out that I was dead, because I'm very much alive," Streetman told Diamant.

Streetman found out about his apparent demise from his Equifax credit report big block letters declaring, "consumer deceased."

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"I didn't know I'd ever love a dead man,” Streetman’s wife Annie said with a bit of a laugh.

But the impact of that error wasn't funny at all.

"If my wife hadn't had good credit, I wouldn't have been able to get anything. I had to buy hearing aids, which I have to have to be able to hear, to be able to talk to people," Ed Streetman said.

The mistake only got fixed after Streetman sued Equifax in January. The case took five months to settle.

"The credit reporting agencies essentially have one job: to accurately report their customers' credit," Channel 2 legal analyst Esther Panitch said.

But we reviewed federal credit reporting lawsuits across the country and found consumers named the big three credit reporting agencies more than 10,000 times in lawsuits between 2007 and 2016.

Channel 2 Action News uncovered a startling recent spike with more than half of those suits filed in just the last three years.

"There was certainly large flapping red flags that were going off," Panitch said. “They were already having so many problems getting back to customers or repairing the credit that was not the customer's fault."

[READ: Frustrated consumers report credit freeze problems]

A jury in Oregon awarded Julie Miller more than $18 million in 2013, after she sued Equifax over multiple mistakes on her credit report, which she spent nearly two years fighting to fix.

"There was all kinds of incorrect information like 40 debt collector information and incorrect Social Security and birth dates," Miller said.

A judge later knocked the award down to $1.6 million, but still called Equifax's conduct "reprehensible." She wrote in her ruling that any "award that is sufficient to sting economically would not be constitutional."

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Georgia Watch's Liz Coyle said that worries her.

"What we're finding now is there's virtually no accountability for these three credit reporting agencies," Coyle said.

A 2012 nationwide study by the Federal Trade Commission confirmed errors on at least 20 percent of the consumer credit reports it selected at random.

In 2015, Equifax, Experian and Transunion all signed a sweeping, $6 million settlement with 30 states, including Georgia, promising to do a better job investigating and resolving consumer complains.

[READ MORE: 5 things to expect when you freeze your credit]

"Do mistakes happen? Absolutely. Nobody in their right mind would say that mistakes don't happen," credit expert John Ulzheimer told Diamant.

Ullzheimer explained that the credit bureaus build reports from information provided by furnishers including banks, loan servicers and credit card companies.

"So the plaintiff's lawyers will often throw in the credit bureaus as co-defendants as a way to get a quick settlement to fund the rest of a lawsuit against the real mark, which is the furnisher of the information," Ullzheimer said.

As for Ed Streetman, his mortgage company told Equifax otherwise.

"They know I'm alive now," Streetman said.

Diamant contacted each of the big three credit bureaus to get their take on this recent surge in lawsuits.

Only Equifax weighed in with a brief emailed statement saying:

"Our investigation of consumer disputes is not triggered by the filing of a lawsuit. A consumer may, at any time, dispute an item on his or her credit file by phone, by mail or online, and we will promptly investigate the disputed item.”

Cox Media Group