Fair Credit Reporting: 4.4.6.3.2 Examples of Illogical and Inconsistent Information
The CFPB Advisory Opinion on facially false dates gives as examples of illogical or inconsistent information:
The CFPB Advisory Opinion on facially false dates gives as examples of illogical or inconsistent information:
CRAs rely for much of the information in their files on data provided by furnishers, particularly by their creditor and debt collector subscribers. Errors by furnishers will lead to erroneous consumer reports,803 unless the CRA takes appropriate preventative procedures.
CRAs cannot take data compiled for one purpose and blindly report it as part of a consumer’s file, but have a duty to minimize the risk of incorrect interpretations of that data. It is essential for consumer reporting that CRAs, furnishers, and users have a common understanding of what information means.819
The gathering and maintenance of public records pose unique accuracy problems for CRAs. Special problems exist where CRAs review, interpret, and then manually record judgments, tax liens, or bankruptcies.
The three major nationwide CRAs handle a large volume of consumer disputes. In order to handle those disputes, their trade association, the Consumer Data Industry Association (CDIA), has developed an electronic dispute processing system known as e-OSCAR (Online Solution for Complete and Accurate Reporting). Understanding this system is critical to understanding the CRAs dispute handling procedures.
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.
A CRA must establish reasonable procedures to ensure maximum possible accuracy where it is transcribing information into its file.909 A common, therefore reasonable, procedure in data entry is to double check the information by having it entered twice, by separate data entry clerks, and then compare the two transcriptions.
A consumer’s file at a CRA may be incomplete for several reasons: a creditor’s failure to provide any information about the consumer’s account, a furnisher’s failure to include complete information about existing items in a file, or the failure to update existing items in a file.912 The consumer might lack any file at a CRA.913 A CRA might also fail to include certain information even though it has been furnished to the CRA.
The FCRA does not require a CRA to include in reports to users all information it has about a consumer in its files. In general, the nationwide CRAs have a policy of deleting closed accounts with positive history after ten years.914
CRAs must establish reasonable procedures to ensure that information is not outdated, even if the information is accurately reported as being current only as of a certain date, because the report produces a misleading picture of the consumer.964 The user of a consumer report cannot be ensured of receiving the most accurate information reasonable under the circumstances if information is permitted to become misleading with the passage of time.
It should be noted that certain attributes of a consumer’s file may be updated upon dispute without the occurrence of an ACDV exchange.
Processing of consumer disputes is a fairly mechanical procedure. Until 2013, the nationwide CRAs did not forward the actual dispute letters or any accompanying documents to the furnisher.1660 The only contact between the CRA and furnisher was the one-page electronic ACDV. Nor did CRA employees contact a live person as part of the dispute process and reinvestigation or exercise any personal discretion. The CRA dispute employee solely coded the dispute category and then forwarded the ACDV to the furnisher.
In litigation, the “Big Three” each tend to produce the same corporate witnesses from one case to another concerning that CRA’s dispute and reinvestigation procedures. No matter the geographic location or issue involved in a case, the CRA will tend to utilize only one or two of a small number of individual employees, who specialize in being professional witnesses in these cases. It can be expected that these employee witnesses will be able to generally describe the CRA’s procedures and will develop the CRA’s position in the best possible light.
FCRA claims must be brought within two years of the plaintiff’s discovery of the “violation that is the basis for . . . liability,” but in no event more than five years after the date of such violation.1675 In the context of a consumer’s dispute triggering a CRA’s reinvestigation duties, the date of the violation that begins the limitations period is thirty days after communication of the dispute to the CRA, which is when the CRA’s reinvestigation must be completed.1676
The FCRA has two provisions governing consumer reporting agency at the end of a reinvestigation.
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.
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.
A consumer reporting agency is required to notify the furnisher when the CRA corrects or deletes information as a result of the reinvestigation.1737 Such a notice should trigger a separate responsibility for the furnisher—to cease furnishing any information that the furnisher “knows or has reason to believe” is inaccurate1738—since the correction/deletion notice from the CRA should serve as reason to believe that the information was inaccurate.
Where the CRA corrects or deletes the disputed items, there are steps the consumer should take to follow up. First, obtain another copy of the information in the consumer’s file to confirm that the corrections and deletions were made.1742 This is especially important if the CRA has provided only a partial file at the conclusion of the reinvestigation.1743
One of the most pernicious reporting abuses suffered by consumers has been the repeated reintroduction of inaccurate information into one’s consumer report after it has already been deleted once, twice, or even more times before. Consumer reporting agencies routinely recapture uncorrected information from monthly or periodic electronic transmissions from creditors who have never corrected their own files.
Sometimes the problem arises at the CRA—not the creditor—level, where the a CRA has only suppressed or cloaked the information, called a “soft-delete,” instead of performing a “hard-delete” that erases the information from the CRA’s database.1757 The purpose for this function is to prevent a later re-reporting of the same account by the same furnisher.
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