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Fair Credit Reporting: 6.7 Furnisher Must Furnish Dates of Delinquency

Accounts placed for collection or charged to profit and loss generally may not be included in consumer reports after seven years, as afterwards the information is considered obsolete.488 The seven-year period begins either 180 days after the first missed payment or when the account is placed for collection or charged to profit and loss.

Fair Credit Reporting: 6.9.1 “Financial Institution” as Defined by Gramm-Leach-Bliley Must Notify Customers of Negative Information Furnished to Reporting Agencies

The FCRA requires that a “financial institution” must notify a customer that it is furnishing negative information about that customer.504 The notice must be given within thirty days of reporting negative information.505 This requirement applies to financial institutions as defined by cross reference to the Gramm-Leach-Bliley definition of a financial institution.506 This furnisher notification requirement is further limited by the FCRA to only tho

Fair Credit Reporting: 6.9.2 Special CARES Act Reporting Requirements

The Coronavirus Aid, Relief, and Economic Security (CARES) Act517 amended the FCRA to provide temporary consumer reporting relief in response to the economic upheaval caused by the COVID-19 pandemic, adding subparagraph (F) to section 1681s-2(a)(1). This provision expires 120 days after the termination of the national emergency declared by the President over the COVID-19 pandemic.518

Fair Credit Reporting: 6.10.1.1 Formal Consumer Reporting Agency Dispute Process Subjects the Furnisher to Obligations That Are Enforceable by the Consumer

Furnishers are subject to only a single category of duties that may be enforced by consumers—despite the fact that they are the people with the greatest incentive and ability to police their own consumer reports.532 These privately enforceable duties are limited to the process where consumers may dispute the accuracy and completeness of information by initiating a reinvestigation under section 1681i with the CRA (and where applicable via a reseller),533 not with the person who furnished

Fair Credit Reporting: 6.10.1.2 Deficiencies in the CRA Reinvestigation Process

Absent a section 1681i(a)/1681s-2(b) dispute lodged with a CRA or reseller, furnishers are simply not liable to the consumer for a breach of any of their other FCRA duties, such as to initially report accurate information,546 to correct and update furnished information,547 and to comply with the other FCRA requirements for furnishing information.

Fair Credit Reporting: 6.10.2.1 Numerous Cases Uphold a Consumer’s Right to Seek Relief

Furnishers are required to undertake five enumerated duties upon receipt of a notice that the consumer has disputed the accuracy or completeness of any information provided by that furnisher with a consumer reporting agency.567 Any furnisher who fails to comply with any of these five section 1681s-2(b) duties is liable to the consumer in a private cause of action for its negligent or willful noncompliance.568 Numerous cases affirm the consumer’s right to seek relief for violation of these duties

Fair Credit Reporting: 6.10.2.3 Requirement of a Consumer’s Dispute with the CRA Is a Congressionally-Imposed “Filtering Mechanism”

Congress carefully distinguished between section 1681s-2(a), requiring furnishers initially to report accurate and complete information but omitting any private enforcement mechanism, and section 1681s-2(b), permitting private enforcement of any breach by furnishers of their subsequent duty to help investigate consumer disputes. In effect, Congress decided that furnishers are entitled to the proverbial “one free bite,” as confirmed by the Ninth Circuit in the seminal case recognizing the right of consumers to enforce a furnisher’s breach of its investigation and related duties:

Fair Credit Reporting: 6.10.2.4 Inaccuracy Is Required for Furnisher Liability

The overwhelming authority now holds that disputed information must, in fact, be inaccurate or incomplete in order for a consumer to maintain a claim to redress the furnisher’s failure to comply with its duties under section 1681s-2(b). While there are some earlier cases have allowed cases to proceed without an inaccuracy, after the Supreme Court’s decisions in Spokeo v. Robins613 and TransUnion v.

Fair Credit Reporting: 6.10.2.5 CRA’s Notification to a Furnisher of an Inaccuracy Based on an Underlying Legal Dispute Triggers the Furnisher’s Section 1681s-2(b) Duties

Several circuit courts of appeals have held that CRAs are not equipped to arbitrate unresolved legal disputes between consumers and furnishers through the FCRA dispute process, and therefore that CRAs are not liable for their failure to investigate or correct disputes based on the legal validity of debts that only a tribunal can resolve.633 The rationale for this body of law establishes why the CRA exception does not apply to the duties of furnishers under section 1681s-2(b); indeed, several district courts and the leading circuit court opini

Fair Credit Reporting: 6.10.3.1 Consumer Reporting Agency Investigation Must Involve the Furnisher

The reinvestigation procedures that a CRA undertakes when a consumer disputes the accuracy or completeness of information must involve the person who furnished the disputed information to the CRA.676 After a consumer has initiated the reinvestigation by submitting a dispute to a CRA (or as appropriate with a reseller),677 the CRA must notify the furnisher.678 The CRA must provide this notice of dispute within five days after receipt of the dispute

Fair Credit Reporting: 6.10.3.2 How Disputes Are Communicated in Practice

In practice, the consumer’s dispute is communicated by the CRA to the furnisher using a Consumer Dispute Verification form, known colloquially as a CDV. An automated version of the form, communicated entirely electronically, is known as an ACDV.681 Although the statute does not specify any particular form, it does require notification “in a manner” established by the CRA with the furnisher.682

Fair Credit Reporting: 16.8.3 Authorized User Issues

Credit card issuers often report information about an account on the credit reports of authorized users, that is, consumers who are authorized to use an account but generally are not liable (depending on state law).370 Regulation B, which implements the Equal Credit Opportunity Act, requires creditors to furnish credit report information for a spouse who is an authorized user or joint accountholder, and permits such furnishing for non-spousal authorized users.371

Fair Credit Reporting: 9.2.1.2a Identity Theft Report

Regulation V defines the term “identity theft report.”31 This definition imposes some significant burdens on consumers. Thus, any consumer seeking to invoke the extended fraud alert32 or the blocking provisions of the FCRA,33 should check to make sure that any police report meets the regulation’s requirements.

To qualify as an “identity theft report” under the FCRA, the report must meet the following criteria:

Fair Credit Reporting: 15.1.1 What Is an Investigative Consumer Report?

A typical consumer report lists specific objective information concerning a consumer’s credit history, criminal record, employment, address, or related subjects. The information is obtained from creditor, public, or other written records. However, sometimes a user, usually an insurance company or prospective employer, requests an investigative consumer report.

Fair Credit Reporting: 15.2.2 Report Must Concern Character, General Reputation, Personal Characteristics, or Mode of Living

The first element deals with the report’s subject matter, which must concern character, general reputation, personal characteristics, or mode of living.16 In contrast, an ordinary consumer report can arise from information regarding any of these four qualities, or regarding a consumer’s creditworthiness, credit standing, or credit capacity.17 This distinction suggests that the special provisions for investigative consumer reports are not thought necessary when only credit-related informa

Fair Credit Reporting: 15.2.4.1 Generally

The Act specifically excludes from the definition of investigative consumer report a report that consists solely of specific factual information on a consumer’s credit record obtained directly from a creditor or a CRA (where the CRA obtained the information from a creditor or the consumer).29 A report with both non-investigative and investigative information is still an investigative consumer report, since the statutory definition of an investigative consumer report is a consumer report “or portion thereof” that contains investig

Fair Credit Reporting: 15.2.4.2.1 Introduction

The FCRA was amended in 2003 by FACTA to meet a rising demand by employers to exempt certain reports about employees from the requirements for investigative consumer reports. Employers had complained that the FCRA unfairly undercut meaningful investigations of employee misconduct by requiring the employer to provide FCRA notices ahead of time, notices that effectively alerted the employee to the employer’s suspicions.35

Fair Credit Reporting: 15.2.4.2.2 Applicability to employee background checks

The second qualifying reason for the exclusion, compliance with federal, state, or local laws, is potentially quite broad. For example, an employer’s investigation of an employee’s discrimination complaints was ruled to be in connection with “compliance with Federal, State, or local laws” and thus exempt from the definition of a consumer report.45 The applicability of the exclusion does not depend on the particular motive or purpose of the participants.46