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Fair Credit Reporting: 4.5.3.3 Investigation Required If Information Is Incomplete or Not Updated

The FCRA provides a right of reinvestigation where the consumer disputes the “completeness or accuracy” of any item in a file.1401 Obviously, the term “completeness” implies more than just accuracy, so that the consumer has a right to require reinvestigation if information relevant to an item is not included in the file.1402 However, the Fifth Circuit has held that the right to a reinvestigation is not triggered if the consumer disputes the absence of a specific acc

Fair Credit Reporting: 4.5.3.4.6 When the consumer has an underlying legal dispute with the furnisher

Most, but not all, of the Courts of Appeals that have considered the issue have held that CRAs are not required to investigate or resolve issues concerning the legal validity of debts.1488 However, the CFPB and FTC have taken the opposite position in an amicus brief filed in the Second Circuit, maintaining that the FCRA does not contain an exception for legal disputes and urging rejection of any distinction between factual and legal inaccuracies.

Fair Credit Reporting: 4.5.6.2 Translation of Disputes into Limited Number of Codes

The ACDV contains only a limited amount of information, including: (1) identifying information about the consumer in the CRA’s file; (2) one or two codes summarizing the consumer’s dispute; and (3) if the CRA deems it necessary, a one-line free-form narrative field that supplements the dispute codes. This free-form field is sometimes referred to as the “FCRA Relevant Information field,” but is not used in the majority of cases. The CRAs’ procedures manuals offer almost no instructions for their ACDV employees as to what information should be placed in this one-line text field.

Fair Credit Reporting: 4.3.6.3 Treatment of Deficiencies After a Short Sale or a Foreclosure

A “deficiency,” is the difference between the amount realized from a short sale or foreclosure sale, and the balance due on the mortgage. In a few states, lenders are prohibited from recovering this deficiency. In some of these states (notably California prior to 2014), this prohibition does not extinguish the debt, but only prohibits the lender from using judicial process to collect it.

Fair Credit Reporting: 4.4.2 The Consumer Report Must Be Inaccurate

To challenge a CRA’s procedures to ensure maximum possible accuracy, the procedures must not only be inadequate, but the report information must also be inaccurate.595 In other words, if inadequate procedures produce a report on a consumer that is completely accurate, that consumer cannot bring a section 1681e(b) action.

Fair Credit Reporting: 4.4.3 The CRA Must Furnish a Consumer Report

Unlike an FCRA reinvestigation claim, which regulates the content of a consumer’s “file,”609 the accuracy requirements of section 1681e(b) govern the content of a “consumer report.” As considered elsewhere in this treatise, there is a distinction between a “consumer report” and a “consumer file disclosure.”610 The latter is provided directly to the consumer by the CRA as a copy of the consumer’s file pursuant to the disclosure provisions of the FCRA.61

Fair Credit Reporting: 4.4.5.2.1 Burden of proof

In the “overwhelming” majority693 of cases, the reasonableness of the procedures will be a question for the jury.694 However, there is a variance amongst the circuits on the plaintiff’s burden of proof for a claim under section 1681e(b) for failing to follow reasonable procedures, as well the order of the burden shifting.

Fair Credit Reporting: 4.4.5.2.2 Sources of proof

If the plaintiff has the burden to show the unreasonableness of the CRA’s procedures, there are a number of potential sources of evidence in addition to the consumer’s file or report. Practitioners should seek to discover all prior consumer complaints and lawsuits against the defendant CRA alleging similar conduct or FCRA violations.721 Such evidence is directly relevant to the degree of unreasonableness.722 It will constitute notice that the CRA cannot then refute.

Fair Credit Reporting: 4.4.6.3.3 Reporting living consumers as deceased

One of the worst types of inconsistent file cases is the reporting of a live consumer as deceased.792 The CFPB has listed the reporting of a consumer as deceased on one account, despite the reporting of payment activity on every other account, as an example of information that it is facially false and logically inconsistent.793

Fair Credit Reporting: 4.4.6.7 Identity Theft

The FACTA amendments to the FCRA mandated a number of procedures regarding identity theft. In addition, states have enacted protections that consumers can use to prevent identity theft. Most of these procedures must be invoked by notice from the consumer or identity theft victims. These procedures are discussed at length in Chapter 9, infra.

Fair Credit Reporting: 4.6.1.2 Copy of the Corrected Report

The FCRA specifically requires after a reinvestigation that the CRA provide in writing “a consumer report that is based upon the consumer’s file as that file is revised as a result of the reinvestigation.”1709 However, Equifax and Experian often provide only the portion of the consumer’s credit file which was investigated and do not provide a full version of the consumer report. For example, if a consumer disputes a single tradeline, the CRA may provide only a single page showing that individual trade line.

Fair Credit Reporting: 4.6.1.3 Description of Procedure Used

The FCRA provides the consumer a right to request a description of the procedure used to determine the accuracy and completeness of the disputed information.1716 This information must include the business name and address, and if reasonably available, the telephone number of any furnisher contacted during the reinvestigation.1717 This information may be particularly useful if a dispute remains, and if the consumer has had difficulty locating this creditor.

Fair Credit Reporting: 4.7.2.1 Generally

The FCRA’s provision governing the reinsertion of previously deleted information has three parts: (1) CRAs must adopt procedures to prevent the reappearance of material, except as specifically allowed;1762 (2) for previously deleted material to be reinserted, the material must be certified by the furnisher;1763 and (3) if material is reinserted, the consumer must be promptly notified.1764 What constitutes a “reinsertion” for purposes of these

Fair Credit Reporting: 4.2.4.1.2 When is information misleading and thus inaccurate

If information is ambiguous and susceptible to two meanings, one of which is misleading, the report may be deemed inaccurate.173 A criminal background report might be technically accurate when it uses the word “pending” to indicate that the CRA’s investigation has not been completed, but can mislead users into believing that criminal charges are the item “pending” against the consumer.174 In determining whether reported information is misleading, the Third Circuit has h