The CFPB recently issued a bulletin highlighting the obligations of debt buyers, debt collectors, and others who furnish information to credit reporting agencies (CRAs) under the Fair Credit Reporting Act (FCRA). In particular, the CFPB is concerned that furnishers may direct the CRAs to simply delete disputed items from consumer reports without conducting a proper investigation.
According to the CFPB, reasonable investigations of consumer disputes are important because they
- Provide a critical check on the accuracy of furnished items;
- Prompt furnishers to reconsider information that a consumer has identified as incorrect;
- Help identify systematic problems with respect to the general accuracy of the information that furnishers provide to CRAs; and
- Reduce the likelihood of harm to the consumer by carrying out additional steps that the FCRA requires in response to a dispute, such as notifying all CRAs of inaccurate information.
The CFPB reminds furnishers that they should not assume that they cease to be furnishers with respect to a disputed item just because they direct the CRAs to delete that item. In addition, it is not safe to assume that merely deleting an item constitutes a reasonable investigation. Whether an investigation is reasonable will depend on the circumstances of each case.
Furnishers should ensure they are meeting their obligations under the FCRA regarding consumer disputes of information furnished to CRAs, as the CFPB will continue to monitor compliance with the law, take supervisory and enforcement actions to address violations, and seek corrective measures, including remediation of harm to consumers.