Mexicans and foreigners’ notion of the ‘Credit Bureau’ is often erroneous. For this reason, when they have a problem with it, they do not know how and with whom to act. Most think it’s a government system created to control their business activity. Also, due to being affiliated with the government, there is not much they can do when they have a problem with the ‘Credit Bureau’. These ideas are inaccurate; we will show why in this entry.

True Nature

The truth is that the ‘Credit Bureau’ is not a centralized system controlled by the government but is made up of private entities called Credit Information Companies, which are regulated by the Law to Regulate Credit Information Companies, which implies that individuals who meet the requirements contemplated in the law and other legal provisions, may become be part of this system.

On the other hand, ‘Buró de Crédito’ is the commercial name under which the first Credit Information Society in Mexico was established, that is, Trans Union de México, S.A, Credit Information Society. From that name, this term became popular and was used colloquially instead of credit information system.

Moreover, while it’s true that the law was reformed in 2014 so that the government could create a parastatal entity that was part of this system, it is also true that currently, the only entities authorized to be part of the Buró de Crédito are the companies called Trans Unión de México, S.A, Sociedad de Información Crediticia; Círculo de Crédito, S.A, Sociedad de Información Crediticia and Dun & Bradstreet, S.A. Sociedad de Información Crediticia.

Finally, it’s important to highlight that entities authorized as Credit Information Companies are obliged to exchange consumer credit data among themselves before payment of a compensatory fee so that their reports are more complete and the system is as truthful as possible.

Purpose

The purpose of the Credit Information Companies in Mexico is the collection of information and credit history of people and companies, the establishment of preventive and explanatory labels in their reports, as well as the risk rating service for granting credit according to the parameters issued by the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores)

To make this possible, authorized entities gather people’s consumption movements through the exchange of information with the institutions that contract their services in order to offer them indiscriminately to the rest of their clients.

Who Can Retain the Credit Bureau in Mexico?

According to the law, only financial entities (banks, insurance institutions, popular savings, credit banks, credit unions, etc.), commercial companies, and SOFOMES (Multiple-Purpose Financial Companies) can use this system and acquire the services of the Credit Bureau.

Credit Report’s Access

The fact that Credit Information Companies enter into contract agreements with private entities to provide consumer information does not imply that they can share that data without restrictions. On the contrary, by law, users of the “Credit Bureau” must require consumers’ express consent to access their credit history. The authorization must be by handwritten signature or by reliable electronic means. If authorized by the consumer, this authorization can be valid for one to two years.

The above authorization is excepted when requested by the Bank of Mexico, the National Banking and Securities Commission, the judicial authorities, and the federal tax authorities when they request it for tax purposes to tackle money laundering or to punish the financing of terrorism.

On the other hand, express authorizations to access a person’s credit history in the case of commercial companies must be stored directly by the Credit Information Companies for up to five years. Financial entities and SOFOMES must also retain the authorizations for a maximum period of one year.

Credit Report’s Access Without Authorization

Financial secrecy is violated if a financial institution, SOFOME, or commercial company can access a person’s credit report without express authorization. With this, in the case of the first two entities, a hearing must be given to the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) and, concerning commercial companies, to the Federal Consumer Prosecutor’s Office (PROFECO) so that they impose the corresponding fines. In more severe cases, even filing criminal complaints.

Consumers’ Rights

According to the law, consumers or clients of credit services shall have the following rights:

• They are given a free Special Credit Report every twelve months, which they can pick up at the Credit Information Society branch or via email.
• That said report contains: I. the credit history; II. the opening dates of the credits; III. the dates of the last payment and closing, if applicable; IV. the credit limit; V. if appropriate, the total balance of the contracted operation and amount to be paid; and VI. the observation and prevention labels applicable to each credit, such as write-offs, complaints, claims, lawsuits, etc.
• The right that Credit Information Companies send the Special Credit Report requested by the client within five business days from the date the company received the corresponding request.
• The right that charges regarding credits that do not have the client’s express authorization must not be reported in their credit history, or those whose credit line has not been used and, where appropriate, only present charges for commissions.
• The right that pending payment credits are recorded in the credit report for a maximum period of six years counted from the date of the first non-payment.
• The right that pending payment credits whose amounts are not greater than 7,636.8 pesos are only registered in the credit report within a maximum period of four years.

As a special note, the law provides an exception to eliminating unpaid credits from the registry when they are greater than 3,054,720 pesos or four hundred thousand UDIS. Also, in cases where there is a final judgment for the commission of an intentional property crime related to some credit and such circumstance has been previously notified to the ‘Credit Bureau’, there shall not be statutes of limitations for these cases.

Rectification

Like any other legal institution, once it comes into operation, problems arise with its application. The ‘Credit Bureau’ is not the exception. Therefore, when you do not agree with the information in your report, you can file a complaint highlighting the records you are disputing and, where appropriate, attach copies of the supporting documentation of the disagreement.

Thereafter, the Credit Information Society, before the complaint was filed, must notify the financial entity, commercial company, or SOFOME responsible for the disputed credit within five business days from receipt of the complaint. Once notified, the credit information society must modify its database and include a label indicating that the registration is contested.

The complaint must be answered in writing within fifteen days. If they do not answer within that period, the Credit Information Society must modify or delete the contested information from its database because the claim is presumed true.

On the other hand, if the complaint is answered and its inadmissibility is argued, the defendant must express in its answer the elements considered to support it and a copy of the evidence supporting its answer. Once this is done, the Credit Information Society must send the answer and annexes to the complainant within five business days.

Once the above has occurred, the complainant may express in a text no longer than two hundred words the arguments of why, in his opinion, the information provided by the financial institution, commercial company, or SOFOME is incorrect, and request that said text be included in his future credit reports, without resolving the complaint on merits the Credit Information Society—since it doesn’t have jurisdiction since it’s a private entity—.

In any case,  the Credit Information Society may agree with the commercial companies, financial institutions, or SOFOME to adopt the arbitration resolution processes before Condusef or Profeco contemplated in their respective laws. Still, the complainant must accept them at the time. If the complaint doesn’t accept the arbitration resolution process, he must file a commercial lawsuit and seek legal relief.

By beLegal abogados S.C

STAFF

Abogados en Ciudad Juárez, Chihuahua, México

Contact the firm at: [email protected] or call (656) 774-75-73 for English assistance or (656) 271-41-43.