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Fair Credit Reporting: 6.4.2.4 Interaction with the Furnisher’s Duty to Correct and Update Inaccurate or Incomplete Information

The two accuracy standards must be read in conjunction with the subsection that immediately follows them establishing a duty to promptly correct and update furnished information determined to be incomplete or inaccurate.225 This duty is applicable to furnishers who regularly and in the ordinary course of business furnish information to CRAs.226 In general terms, furnishers are required to provide accurate, complete, and updated information.227

Fair Credit Reporting: 6.4.2.5 Furnisher Accuracy Duty and Metro 2

The Metro 2 standard operating procedure employed by creditors for transmitting information to CRAs,233 formally known as the CDIA Credit Reporting Resource Guide, has been painstakingly designed so that information vital to the preparation of accurate consumer reports is identified and defined in a manner to facilitate the routine provision of accurate and complete information.

Fair Credit Reporting: 6.4.2.6 FTC Staff Opinions on Furnisher Accuracy

Formerly, the Federal Trade Commission had been the primary agency charged with implementation of the FCRA.264 FTC staff had issued informal opinions regarding what a furnisher may report. One creditor was told that it may not submit information about delinquencies for which the consumer is not actually liable. The mortgage lender had been reporting payment histories of consumers who took title to mortgaged property (by will, for example) without formal obligation to make payments.

Fair Credit Reporting: 6.4.2.7 Ability of Furnishers to Delete Information

Furnishers will sometimes claim that they are prohibited from removing supposedly accurate information from a consumer’s credit report that they previously have furnished. In particular, consumers and practitioners are advised to ask for deletion of negative information in return for payment of a debt—a practice sometimes called “pay for deletion.”266 Yet debt collectors and creditors may assert that “pay for deletion” is unlawful under FCRA.

Fair Credit Reporting: 6.4.2.8 California Furnisher Accuracy Standards

The California version of the FCRA—the Consumer Credit Reporting Agencies Act (CCRAA)—has a standard similar to that of the FCRA277 in that it prohibits a furnisher from providing information if it “knows or should know the information is incomplete or inaccurate.”278 Unlike almost all other state laws governing furnisher accuracy, this California provision is specifically saved from preemption and is privately enforceable.279

Fair Credit Reporting: 6.4.3.1 Generally

The Fair and Accurate Credit Transactions Act of 2003 (FACTA) required guidelines to be issued for furnishers regarding the accuracy and integrity of information they furnish to the consumer reporting agencies.282 FACTA also mandated regulations to be issued requiring furnishers to establish reasonable policies and procedures for implementing those guidelines.283

Fair Credit Reporting: 6.4.3.2 Furnishers Required to Have Policies and Procedures for Accuracy and Integrity

The furnisher accuracy and integrity guidelines are divided into two parts—the Guidelines themselves and mandatory provisions in Regulation V. Regulation V requires furnishers to establish and implement reasonable policies and procedures regarding the accuracy and integrity of the information that they furnish to CRAs.288 However, while having a set of policies and procedures is mandatory, compliance with all of the Guidelines is not.

Fair Credit Reporting: 6.4.3.3 Definitions

Regulation V defines accuracy and integrity302 for the purposes of both the accuracy and integrity guidelines and the direct dispute regulation.303 The Supplemental Information for the regulation states that these definitions are not intended to be used in any other context (for example, for purposes of the accuracy requirements for CRAs).304 However, these definitions should be considered in pari materia with the standard for accuracy und

Fair Credit Reporting: 6.4.3.4.1 Introduction

The guidelines are located in Appendix E of Regulation V. They are divided into three parts: Nature, Score, and Objectives; Establishing and Implementing Policies and Procedures; and Specific Components of Policies and Procedures.

Fair Credit Reporting: 6.4.4 Accuracy When Creditor Clearly and Conspicuously Maintains a Special Address for the Consumer to Give Notification of Inaccurate Information

Large national creditors and many others who furnish information to CRAs may maintain a special address which may be used to notify the creditor of inaccuracies. The address should be readily available to the consumer and may be used by the consumer in any effort to have the creditor correct information that may be provided to CRAs. Many creditors will maintain addresses that a consumer may use to notify the creditor that specific information is inaccurate because it fosters good customer relations.

Fair Credit Reporting: 6.5.1 Furnishers Must Promptly Correct and Update Information

If a furnisher determines that information it has provided to a consumer reporting agency is inaccurate or incomplete, the furnisher must promptly inform the CRA of the determination and provide corrected information.378 This duty applies only to furnishers that “regularly and in the ordinary course of business” furnish information on at least one consumer. This condition is typically inconsequential since most entities that furnish information to CRAs do so on a regular and ongoing basis.

Fair Credit Reporting: 6.5.2.1 Generally

The Fair and Accurate Credit Transactions Act of 2003 (FACTA) established the right of consumers to directly dispute consumer report information with the furnisher of the information.392 Prior to FACTA, the FCRA had no provision allowing a consumer to dispute an inaccurate item of information and request a reinvestigation directly with the furnisher.

Fair Credit Reporting: 6.5.2.3 Notice of Dispute

In order to trigger the direct dispute obligation, a consumer must submit a proper notice of dispute.414 The notice must be sent to either an address provided by the furnisher set forth on the consumer report or an address clearly and conspicuously specified by the furnisher for submitting direct disputes that is provided to the consumer in writing or electronically (if the consumer has agreed to the electronic delivery of information from the furnisher).415 If the furnisher has failed to specif

Fair Credit Reporting: 6.5.2.4 Exceptions

Regulation V contains a number of exceptions to the direct dispute requirement. Furnishers are not required to conduct an investigation if the dispute relates to:

Fair Credit Reporting: 6.5.2.5 Frivolous or Irrelevant Disputes

Furnishers are not required to conduct an investigation of a direct dispute if the furnisher has “reasonably determined” that the dispute is frivolous or irrelevant.434 Note that this provisions only apply to disputes under section 1681s-2(a)(8) sent directly to the furnisher.

Fair Credit Reporting: 6.5.2.6 Furnisher’s Duties

Upon receiving a notice of dispute that triggers a direct dispute obligation, the furnisher is required to conduct a reasonable investigation of the dispute.449 The furnisher must also review “all relevant information” provided by the consumer with the dispute notice.450 The furnisher is required to complete its investigation of the dispute and report the results to the consumer within the timeframes set forth in section 1681i(a)(1).451

Fair Credit Reporting: 6.5.2.7 Reasons for Disputing Directly with the Furnisher

Although the process has no private enforcement mechanism, disputing directly with the furnisher may be advisable for several reasons. Contacting the furnisher certainly makes sense when the error originates from that source. Even when the CRA has inaccurately transcribed information or mismerged files, the CRA is also likely to respond readily to corrections coming from the furnisher. When the furnisher supplies the CRA with additional information, it is also likely that the CRA will include this information in the consumer’s file.

Fair Credit Reporting: 6.6 Furnisher Must Note Disputes

If a consumer disputes the accuracy or completeness of any information which has been furnished to a consumer reporting agency, the furnisher may not in the future report this information to a CRA unless it notes that it has been disputed.477 Even if the furnisher determines that the disputed information was neither inaccurate nor incomplete, or is unable to make any determination about the dispute raised by the consumer, the furnisher must note that the information is disputed whenever it furnishes the information to a CRA in the future.