e-OSCAR is a web-based computer software that data furnishers (creditors, banks, etc.,) use to communicate with the credit reporting agencies. The system enables Data Furnishers (DFs) and Credit Reporting Agencies (CRAs) to create and respond to dispute letters.
If you are positive a mistake has been made on your credit report, it may be that the e-Oscar investigation system is the reason the mistake was verified as correct. Credit reporting agencies (CRAs) have created an automated computerized system of dealing with credit disputes.
The e-Oscar (Online Solution for Complete and Accurate Reporting) system is used even when consumers send in detailed disputes, with supporting documents. The dispute is broken down into a two or three digit code and sent to the original creditor to verify a simple code, failing the duty to investigate
e-Oscar and disputes
As of 2004 the big three CRAs; Equifax, TransUnion, and Experian-require mandated use of e-Oscar. When a dispute is sent to a CRA by a consumer it is coded from among 26 different dispute reasons such as Not his/hers, claims inaccurate and sent to the data furnisher without any human intervention. The furnisher is than suppose to investigate the dispute and respond with the dispute result to the CRA. When the furnisher conducts an investigation they will look at their files to see to assess the accuracy of the information disputed by the consumer. If they determine the information is reporting incorrectly they will send an update to the CRAs with the correct information. If the furnisher never even responds within the 30 days the CRA must delete the information.
Problems with the e-Oscar System
From the surface e-Oscar is a great idea and will enable consumers to get their dispute resolved faster. The reality seems to be quite different. Two major problems exist with e-Oscar. First, disputes are shoved into a single dispute reason code. This is unfair because often disputes have many reasons. Nevertheless it still gets put into a single dispute code by a low paid employee who is scanning the dispute letter. The second problem is very little documentation is included.
The CRAs are NOT including all relevant information like they are suppose to. The FTC’s Report to Congress on the Fair Credit Reporting Act Dispute Process notes TransUnion typically does not supply copies of consumer-supplied documentation to furnishers but added that, if the documentation can be reasonably verified as being authentic, the account is automatically updated based on the documentation, in lieu of sending an ACDV (Automated Credit Dispute Verification). So if you send a copy of an account statement or some other proof that an account item is reporting incorrectly it rarely makes it to the data furnisher. Why? Because transmitting that information is not easy or cost effective for the CRAs. It requires them to mail it or fax it which costs money. As a result, the supporting documentation is left out.
Introduction
Q: How does the CRA convey a dispute through e-Oscar?
A: The CRA will notify the data furnisher by ACDV. ACDV stands for Automated Credit Dispute Verification. The Automated Consumer Dispute Verification (ACDV) is a consumer dispute that is routed to a data furnisher (DF) from a Consumer Reporting Agency (CRA) via e-OSCAR. ACDVs are sent to the data furnisher on behalf of the consumer.
The data furnisher returns the ACDV once the proper investigation has been completed. AUD stands for Automated Universal Data form. AUDs are initiated by the data furnisher to process out of cycle modifications and updates, and are sent to the CRAs with whom the data furnisher has a reporting relationship.
Batch Interface
Large data furnishers such as MBNA or Chase get lots of disputes. Going through each dispute manually is an expensive and resource intensive process. E-Oscar’s solution is to send all the disputes over in a batch computer file. Hundreds, even thousands, of disputes can be sent from the CRA to the data furnisher at one time.
The data furnisher can then send the computer file back to the CRA with the dispute results of the entire batch. One inappropriate feature is the “reply all” function. This allows the data furnisher to select a response, saying “Account Verified” and respond to all disputes at once.
So if 20 disputes came in, the data furnisher could respond to all 20 disputes with the result “Account Verified” without even looking at any of the disputes! That’s right, the data furnisher is able to respond to all disputes with a single click without even conducting an investigation or even looking at the dispute.
In fact, this is a feature e-Oscar is very proud of and has a section on their web site all about it.
Here s a quote taken from e-Oscar’s web site:
The Batch Interface is an exciting product offering that allows Data Furnishers with large volumes of
Automated Consumer Dispute Verification (ACDV) requests to receive a batch file in an XML format
Once the file is delivered, each Data Furnisher can further automate the development of responses to
ACDVs. The development effort by the Data Furnisher to achieve the benefits of the Batch Interface, will
vary depending on the Data Furnishers internal business and compliance requirements.
For example, one Data Furnisher may choose to auto-populate the response fields automatically for staff
review prior to submission. This business plan would save your staff the time and potential errors of data
entry. Another Data Furnisher may elect to automate only certain response types.
For example, A Data Furnisher might only automate “delete” responses and require that staff review
responses on all other disputes.(emphasis added)
The FCRA states that the furnisher must perform a reasonable investigation. However if the data furnisher is able to automate the investigation process without even looking at the incoming disputes, doesn’t that seem like a violation of the FCRA? How is this considered a proper and legal investigation!?
How long does the furnisher have to conduct an investigation?
A common misconception is that the furnisher has 30 days to perform an investigation of the dispute. This is not true. The 30 day clock begins when the CRA receives the dispute letter from the consumer. The CRA then needs time to send the data furnishers’ response to the dispute to the consumer once it is complete. Therefore the furnisher has around 15-20 days to conduct an investigation.
What happens if a furnisher does not respond?
This is often a desired outcome. Depending on what type of dispute it is, the CRA might update the account in favor of the consumer, or it might delete the trade line off the credit report.
No comments:
Post a Comment