Disputed information in your credit file must be Validated by original creditor. There have been many articles written about the FCRA and how it can be used to help consumers repair their damaged credit files. One Google search will turn up literally hundreds of articles on the subject. Much of the information is either too difficult to understand, or is woefully incomplete. Many of the authors of such articles have an ulterior motive; give the reader a tid-bit of information designed to gently lead them to their website where they then offer to give the reader the “whole story” for a price, or solicit other costly credit repair services.
While I don’t necessarily blame them for trying to make a buck, I,like other consumers of credit repair information would like to simply get the whole story without all the underhanded marketing tactics that are so abundant on the Internet. I promise all of my readers that the information in my posts is “pure” and without strings attached!! Just knowledge, no fat, no bad information, and no marketing! While I do own and run a credit repair agency, the information I post is for CONSUMPTION, not to market my credit repair services.
By its very name, the Fair and Accurate Credit Transactions Act places new emphasis on accuracy of information in consumer reports. Two FACTA sections aim to improve the accuracy and integrity of information as well as give consumers a new right to dispute data included in reports directly with the company that furnished it. These sections are:
Accuracy guidelines for financial institutions and creditors that furnish information to credit bureaus. (FACTA §312(a), FCRA §623(e)(1)). Ability of consumers to dispute information with companies that report to credit bureaus. (FACTA §312(c), FCRA §623(a)(8)).
Like other FACTA sections, the accuracy and dispute sections call for rules to be adopted by the federal banking agency and the FTC. On March 22, 2006, the agencies jointly issued an Advanced Notice of Proposed Rulemaking (ANPR), a means of gathering information prior to a rule proposal. The ANPR can be viewed at www.ftc.gov/os/fedreg/2006/march/060322accuratecredittrans.pdf Public comments received in response to the ANPR can be viewed at www.ftc.gov/os/comments/FACTA-furnishers/index.shtm
While case law has established for the past few years that the Original Creditor (O.C.) can be held liable for reporting inaccurate information (Richardson vs. Fleet, Nelson vs. Chase Manhattan ), the FACTA legislation passed recently allows the consumer to go directly to the original creditor and dispute information which the original creditor (called the information furnisher in the FCRA), has supplied to the credit bureaus. However, before disputing with the original creditor, the CONSUMER MUST HAVE DISPUTED WITH THE CREDIT BUREAUS first. Following this step is crucial.
Again, when you write the Original creditor, you are asking for an INVESTIGATION, not verification. Under the laws, the OC’s are not required to verify an account, only to conduct an investigation. If you want to get results, you must invoke the right laws. O.C.’s are NOT required by law to “verify” anything. Basically, you can dispute information placed on your credit report by an O.C. in the same way as you would with a credit bureau. An original creditor must:
- Conduct an investigation of the dispute
- Review all information provided by the consumer relating to the dispute
- Respond within 30 days to the investigation
- If the information is inaccurate, they must notify the credit bureaus of the mistake and tell the credit bureau to correct it.
It has been my experience as a credit repair professional that most companies (original creditors) do not adequately staff their dispute resolution departments until they are facing a class-action type lawsuit. That’s when the lawyers are brought in to clean things up and resolve whatever dispute occurred through litigation. One consumer complaint is rarely given the attention it deserves because of the simple, yet profound fact that the man-hours to resolve every complaint cannot be justified in a profit-driven environment. Bottom line: they don’t keep their records very well. In fact, most credit card companies only keep records for 13-18 months! Fortunately for consumers, the FACT-ACT now requires any issuer of credit to validate all information it reports to the three major credit bureaus. Section 623 (a) (8) D) of FACTA which is titled: SUBMITTING A NOTICE OF DISPUTE states:
- A consumer who seeks to dispute the accuracy of information shall provide a dispute notice (letter) directly to such person at the address specified by the person for such notices that:
- identifies the specific information that is being disputed
- explains the basis of the dispute, and
- includes all supporting documentation required by the furnisher (original creditor) to substantiate the basis of the dispute.
(i) conduct an investigation with respect to the disputed information;
(ii) review all relevant information provided by the consumer with the notice;
(iii) complete such person’s investigation of the dispute and report the results of the investigation to the consumer before the expiration of the period under section 611(a)(1) within which a consumer reporting agency would be required to complete its action if the consumer had elected to dispute the information under that section; and
(iv) if the investigation finds that the information reported was inaccurate, promptly notify each consumer reporting agency to which the person furnished the inaccurate information of that determination and provide to the agency any correction to that information that is necessary to make the information provided by the person accurate.
§ 623. (b) Duties of furnishers of information upon notice of dispute.
(1) In general. After receiving notice pursuant to section 611(a)(2) [§ 1681i] of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall
(A) conduct an investigation with respect to the disputed information;
(B) review all relevant information provided by the consumer reporting agency pursuant to section 611(a)(2) [§ 1681i];
(C) report the results of the investigation to the consumer reporting agency;
(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and
(E) if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1),
for purposes of reporting to a consumer reporting agency only, as appropriate, based on the results of the reinvestigation promptly –
(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of information.
I won’t provide an interpretation here because that is as straight-forward as it gets. You can call up (or write) your credit card company, or any “furnisher” of credit and demand that they investigate your account for inaccuracies and by law they must comply or be found liable in a court of law. Remember what I wrote above, that the consumer must first dispute with the credit bureaus BEFORE they dispute with the original creditor. Why? Because when you dispute the debt with credit bureaus first, they will almost always verify the debt as legit and accurate (they are supposed to do this by contacting the above mentioned original creditor, but in most cases they don’t). When the debt is verified by the bureaus you then have standing to dispute with the original creditor who then will be liable for verifying a debt with the credit bureaus, but did not (could not) verify it with you - proving no investigation ever occurred!! When you write your dispute letter threatening to sue for damages they will immediately stop reporting the debt to the credit bureaus, who then in turn must delete it from your credit file.
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