The Consumer Financial Protection Bureau said it found deficiencies in how credit-reporting companies, including TransUnion, Equifax Inc. and Experian, handle complaints about consumer data, as the agency explores new rules to rein in the industry.

Those three companies "routinely top the list of complaints submitted by consumers," CFPB Director Rohit Chopra said in a statement Tuesday announcing the agency's annual report on credit and consumer-reporting complaints. "We will be exploring new rules to ensure that they are following the law, rather than cutting corners to fuel their profit model."

The CFPB said it fielded approximately 488,000 complaints between October 2021 and September 2022, which it then shared with the companies. The agency didn't detail what additional regulatory steps it might take, and didn't immediately respond to a request for comment. In some signs of progress, the watchdog found credit-reporting companies are responding more substantially to complaints, and some have provided more relief to consumers who raise concerns.

The report also detailed how some markets are moving in the direction of giving consumers more control over their data. The agency expects to release a proposal on data sharing this year and a final rule in 2024, Chopra has previously said.

"This shifting landscape and alternatives point toward a world where consumers have more control over their data," the CFPB said. "Policymakers and market participants can shape the future of collecting, using and sharing consumers' data in a manner that navigates successfully from surveillance to participation."

Consumer complaints are one indicator of whether markets are serving consumers, and "complaints about credit reporting suggest that the system increasingly is not," the agency said. "The number of CFPB complaints has increased over the past several years."

The agency also offered recommendations for how the companies could improve their interactions with consumers, including by taking into account how automated processes might be an added burden. The industry should also acknowledge that flaws in consumer data could stem from the lack of individual autonomy over the information.

"Enabling increased consumer participation on the data side of consumer reporting has the potential to create a fairer market with added benefits for consumers, consumer-reporting companies and lenders," the agency said in the statement.

TransUnion declined to comment. Representatives for Experian and Equifax didn't immediately respond to requests for comment.

"Consumers, credit-reporting agencies, banks and regulators continue to share a common goal when it comes to credit reports: They should be as accurate and reliable as possible," the Consumer Data Industry Association said in a statement. "The nationwide credit-reporting agencies play an important role in the financial lives of consumers, and we take that responsibility seriously."

Paige Smith reports for Bloomberg News.

Copyright 2023 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.