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Fair Credit Reporting: 2.7.5 “Alternative Data”

There have been numerous efforts to consider and promote the use of “alternative data” in credit decisions—that is, data beyond the information traditionally used in consumer credit reports from the nationwide CRAs. Alternative data is seen as a way to help consumers who lack a credit history or whose history is too scant or “thin” to generate a credit score, referred to as “credit invisibles.”712

Fair Credit Reporting: 2.3.4.2.1 Introduction

Certain basic information about a consumer is not a consumer report if it does not bear on the seven FCRA characteristics. However, if the information falls within the Gramm-Leach-Bliley Act’s definition of nonpublic personal information,116 it may be protected from disclosure by that Act.117

Fair Credit Reporting: 4.4.6.9.5 Reporting of significant updated information that is furnished to a consumer reporting agency

If a CRA is informed of later developments relating to an item in the consumer’s file, either by the furnisher or the consumer, the CRA must update the file.977 A CRA must report significant, verified information it possesses about an item.978 Even when the consumer does not formally dispute the accuracy of a report, if the consumer provides additional information on an incomplete file, then the CRA must include the statement.979 A CRA that r

Fair Credit Reporting: 4.4.6.10.2.3 Furnisher liability for reporting of debts discharged in bankruptcy

Furnishers sometimes do not automatically update the status of accounts included in bankruptcy.1008 While the FCRA does require furnishers to update information,1009 there is no private cause of action for violation of that provision.1010 In general, there is no private remedy for consumers against furnishers for reporting inaccurate information or failing to maintain procedures for accuracy.1011

Fair Credit Reporting: 4.4.6.10.2.4 Class actions settlement reforming CRA procedures for reporting discharged debts

As a result of a major class action settlement, the three nationwide CRAs were required to revise their procedures as to how they report debts discharged in a chapter 7 bankruptcy.1026 The settlements essentially reversed the presumption of non-dischargeability that the CRAs had been applying to chapter 7 bankruptcies by requiring the CRAs to treat all prebankruptcy debts as discharged, unless furnishers provide information showing that a debt was excludable from discharge.

Fair Credit Reporting: 4.4.6.10.4 Issues regarding the status of a bankruptcy

Any report of a consumer’s bankruptcy must identify the chapter under which the case arises, “if provided by the source of the information” about the bankruptcy.1042 Even before this language was added to the statute by amendment, the Conference Report, when the FCRA was first enacted, notes that the House conferees intended that the standards of accuracy shall impose a duty to distinguish between straight bankruptcies and wage earner plans.1043 Thus, bankruptcies should commonly be reported

Fair Credit Reporting: 4.5.3.2 Inaccuracy Required for Liability

The plain language of the FCRA itself does not require a showing of inaccuracy to impose liability for failure to conduct a reasonable investigation.1367 Section 1681i(a) states that, “if the completeness or accuracy of any item of information . . . is disputed by the consumer and the consumer notifies the agency directly, . . .

Fair Credit Reporting: 4.5.1.1 Generally

One of the most critical protections provided by the FCRA is the consumer’s right to dispute the accuracy or completeness of any item of information in their file.1119 A CRA on notice as to potentially inaccurate information in the consumer’s file is in a very different position than a CRA without such notice.1120 Much of the successful litigation against CRAs to challenge inaccuracy within a consumer’s file comes after a consumer has made a dispute directly to the CRA.

Fair Credit Reporting: 4.5.1.2 The Reinvestigation Process

This section discusses the CRA reinvestigation process. The consumer’s request triggers the CRA reinvestigation.1125 While no special language is required to make the request, some care should be taken to appropriately identify which information is being disputed.1126 A request that fails to provide sufficient information or is otherwise deemed to be frivolous will not lead to a reinvestigation.1127

Fair Credit Reporting: 4.5.1.3 How Consumers Learn of Their Right to Dispute

Consumers will frequently learn of their right to dispute inaccurate information from the Summary of Consumer Rights, which the CRAs must provide whenever consumers request a copy of their file disclosures.1133 This form summarizes major rights consumers have under the FCRA, including the right to request a reinvestigation.

Fair Credit Reporting: 4.5.1.4 Longstanding Deficiencies in the Nationwide CRAs’ Dispute Systems

This right to dispute information is an important safeguard necessary to ensure accuracy.1136 The legislative history rightly characterizes the dispute and correction process as “the heart of . . . efforts to ensure the ultimate accuracy of consumer report.”1137 Despite this, the “Big Three” nationwide CRAs and other CRAs have little incentive to accommodate consumers because the CRAs’ customers are their subscribers, rather than the consumers.

Fair Credit Reporting: 4.5.2.1 When a CRA Must Reinvestigate

If a consumer conveys to the CRA a dispute over the completeness or accuracy of any item of information in the consumer’s file, the CRA must delete the disputed information or conduct a reinvestigation.1170 The dispute need not be in writing,1171 although practitioners recommend doing so.1172 The CFPB has reported that 13% of consumer disputes to nationwide CRAs are submitted by telephone.1173

Fair Credit Reporting: 4.5.2.2 Specificity Required of a Dispute

The FCRA does not require that consumers submit disputes on any specific form.1185 A consumer’s lack of precision as to the item being disputed is usually not a sufficient reason to refuse to reinvestigate.1186 But if the consumer does not provide a clear statement that the accuracy or completeness of specific information is “disputed” or “challenged,” the consumer’s statement may not be construed as an exercise of rights under the Act.1187

Fair Credit Reporting: 4.5.2.4.3 Keep a file

In many cases, a request for reinvestigation is just the beginning of a protracted battle with the CRA that may ignore correspondence or fail to follow up as promised. Thus, it is good practice for the consumer to establish a file of all correspondence sent to and received from the CRA, and to have proof that the CRA has received the consumer’s correspondence.

Fair Credit Reporting: 4.5.2.4.4 Send a copy to the furnisher

Consumers should also directly notify the creditor or other furnisher of the disputed information at the same time, if not before.1243 Furnishers must participate in the CRA reinvestigation procedures and conduct their own reinvestigation.1244 A furnisher’s investigation obligation arises when it receives the consumer’s dispute indirectly through the CRA.1245 However, furnishers sometimes claim that they did not receive adequate notice of the