The CFPB has issued a bulletin to companies that furnish information to consumer reporting agencies (CRA) reminding them of their obligation under the Fair Credit Reporting Act (FCRA) to investigate consumer disputes forwarded by a CRA and “review all relevant information” relating to the dispute. In the bulletin, the CFPB warns that it will take appropriate supervisory and enforcement actions to address furnisher violations of the FCRA or other federal consumer financial laws, including requiring restitution to harmed consumers.
The CFPB expects furnishers to have reasonable systems and technologies in place to handle notices of disputes received from CRAs and information regarding disputes, including documentation forwarded by CRAs. (In its press release about the bulletin, the CFPB emphasizes that, with its support, the “e-OSCAR” system used by the three largest nationwide CRAs to send information to furnishers relating to consumer disputes now allows the CRAs to send any relevant dispute documents mailed in by consumers.) The CFPB takes the position that a furnisher’s FCRA duty to review “all relevant information” relating to a dispute requires the furnisher to review and consider all of its own information relating to a dispute as well as all documents that a CRA includes with a notice of dispute or transmits during the furnisher’s investigation.
In the bulletin, the CFPB outlines what it generally expects furnishers to do to comply with the FCRA’s requirements for handling disputes received from CRAs. Furnishers not currently meeting the CFPB’s expectations are advised to “take immediate steps” to comply with the FCRA. The CFPB expects furnishers to comply with the FCRA by:
Maintaining a system that reasonably allows the furnisher to receive information regarding disputes from CRAs, including supporting documentation;
Conducting an investigation of disputed information that includes a review of “all relevant information” forwarded by the CRA and the furnisher’s own information with respect to the dispute;
Reporting the results of the investigation to the CRA that sent the dispute;
Providing corrected information to every nationwide CRA that received disputed information found to be inaccurate or incomplete; and
Modifying, deleting, or permanently blocking disputed information that is found to incomplete, inaccurate, or could not be verified.
In October 2012, the CFPB’s online complaint system began taking complaints from consumers about credit reporting. In the bulletin, the CFPB notes that it is monitoring consumer complaints and will use such complaints to prioritize examinations and other actions. It also notes that it will be reviewing furnisher compliance with the FCRA during examinations and investigations and it signals that it will be very tough on furnishers who fail to conform to its expectations.
Since the CFPB has added significant gloss to the FCRA provision which furnishers need to follow, exceeding the standards that numerous courts have mandated, many furnishers may not be prepared to handle these types of disputes in the manner the CFPB will require. Consequently, we would encourage all furnishers to review their existing policies and procedures with counsel now and revise those policies and procedures as necessary to make sure they can satisfy the CFPB’s requirements.