furnisher's duty

Renewed Focus on Data Furnisher’s Duty to Investigate Credit Reporting Disputes

Recent guidance from the Consumer Financial Protection Bureau (CFPB) underscores the need for effective procedures for handling disputes from consumer reporting agencies (CRAs) and stresses furnisher’s responsibility in this matter. In its September 4, 2013 bulletin, the CFPB reminded the public about several requirements listed in the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681.  Under these requirements, a CRA is to notify a furnisher when a consumer disputes the completeness or accuracy of any information provided by the furnisher to the CRA.  The CRA must also timely provide the furnisher all relevant information regarding the dispute.  In turn, the furnisher must review the disputed information, conduct an investigation regarding the matter, and respond appropriately based on the results of the investigation.  The CFPB states that it expects furnishers and CRAs to comply fully with these requirements, thus supporting CFPB’s effort to keep the information in the consumer reporting system (e-OSCAR) complete and accurate.

The bulletin addresses CFPB’s expectation that furnishers have reasonable systems and technology available to receive and process information regarding the disputes forwarded by CRAs, as well as the expectation that every furnisher review and consider all relevant information relating to the dispute.  The CFPB stressed in the bulletin that it expects furnishers to comply with the FCRA in the following ways:

  1. Maintaining a system capable of receiving information and supporting documentation from CRAs;
  2. Conducting an investigation of the disputed information to include information from the CRA and the furnisher’s own information;
  3. Reporting the results of the investigation to the CRA that sent the dispute;
  4. Providing corrected information to all CRAs if the information is inaccurate;
  5. Modifying, blocking, or deleting information if it is inaccurate, incomplete or cannot be verified.

The CFPB further states in the bulletin that immediate steps should be taken to comply with these requirements if a furnisher doesn’t have them already in place.  The CFPB warns that it will appropriately address violations in appropriate way and seek corrective measures from those furnishers who fail to comply with these requirements.