Don’t Just Delete! CFPB Reminds Furnishers to Properly Investigate Disputes

Recently, the Consumer Financial Protection Bureau (“CFPB”) issued a bulletin to highlight the obligations that debt buyers, debt collectors and others who furnish information to credit reporting agencies (“CRAs”) have under the Fair Credit Reporting Act (“FCRA”) to investigate disputed information in a consumer report. 

Interestingly, one of the main concerns echoed by the CFPB is the practice of merely deleting a line item on a report in lieu of conducting an investigation. Proper investigations of disputes, according to the CFPB, are important because they provide critical checks on the accuracy of furnished information.  Investigations prompt a furnisher to reconsider information that a consumer has identified as incorrect, a process that not only helps the individual consumer at issue but also help furnishers identify systematic problems in their system. If a furnisher’s practice is merely to delete disputed entries instead of conducting an investigation, consumers are denied the full protections of the FCRA. For example, furnishers must provide notice of information found to be inaccurate to all consumer reporting agencies to which it reports. If a furnisher did not conduct an investigation, it may not provide this notice to all credit reporting agencies. Thus, furnishers should not assume that deleting an item will generally constitute a reasonable investigation.

The CFPB has been and will continue to monitor furnishers’ compliance with the FCRA and other federal consumer financial laws and regulations, especially regarding consumer disputes of information they have furnished to CRAs.  As a result, it is important to ensure that your organization is following the CFPB’s established protocol in handling disputes. For more information on the FCRA and CFPB’s enforcement and supervisory actions, contact Nicole Strickler at (312) 334-3442 or at nstrickler@messerstrickler.com.