Obligations of Creditors and Credit Reporting Agencies Under The FCRA
In 1970, Congress adopted the Fair Credit Reporting Act (FCRA) to protect consumers and regulate how credit information is used and disseminated. The FCRA was passed to address the growth of the credit reporting industry – which compiled “consumer credit reports” and “investigative consumer reports” on individuals. The FCRA was the first federal law to regulate the use of personal information by private businesses. The FCRA give consumers the right to know what is in their credit reports and requires that anyone who denies a person credit, insurance or employment because of what is in their credit report, tell you where they got the information and how to contact the issuer.
The FCRA has power over consumer reporting companies, bureaus and agencies that behave in a manner that affects the credit and reporting matters of each person in the United States. As everyone knows, the information supplied through a credit report is utilized by landlords for rent, employers to check reliability and creditors for loans and credit cards.
Consumers generally need to be concerned about two categories of actors: 1) furnishers and 2) credit reporting agencies (“CRAs”).
FURNISHERS
Furnishers do exactly what the term would suggest: they furnish information relating to consumers to one or more consumer reporting agencies for inclusion in a consumer report.” The FCRA requires furnishers to provide CRAs with accurate information relating to consumers. As part of fulfilling their obligations in reporting accurate information to the CRAs, furnishers are similarly required to promptly correct and update information, provide notices to the CRAs of a dispute, provide notice of accounts that were voluntarily closed, and to provide dates of delinquency.
The FCRA also requires furnishers to notify consumers when they furnish negative information about the consumer to a CRA. The notice must be provided no later than 30 days after furnishing the information and must include certain information.
The FCRA requires furnishers to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the consumer information furnished to CRAs.
With respect to consumer disputes, the FCRA requires a furnisher to conduct a reasonable investigation of a dispute submitted directly to a furnisher by a consumer concerning the accuracy of any information contained in a consumer report. Similarly, if a dispute is submitted by a consumer to a CRA, the furnisher must investigate the disputed information, review all relevant information the CRA provided, and report the results of its investigation to the CRA. The furnisher generally has 30 days from the date the consumer filed the dispute with the CRA to complete its investigation and make appropriate notifications.
CRAs
Credit Reporting Agencies (CRAs) are in the business of assembling reports on individuals for businesses, including credit card companies, banks, employers, landlords, and others. CRAs are required under the FCRA to follow “reasonable procedures” to protect the confidentiality, accuracy, and relevance of credit information. The three major CRAs in the United States are Experian, Trans Union, and Equifax., There are also many smaller credit reporting agencies that usually concentrate on reporting on individuals living in certain regions of the country.
Credit reporting companies are required to follow “reasonable procedures to assure maximum possible accuracy” of the information contained in their reports. Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.
PROTECTING YOUR RIGHTS UNDER THE FCRA
Consumers have the right to submit a dispute and request an investigation if they discover an error in a credit report. As described above, both the credit reporting agency and the furnisher have responsibilities for correcting inaccurate or incomplete information. When a consumer (or their attorney) submits a dispute, the credit reporting agency must investigate the items in question – usually within 30 days – unless the dispute is deemed frivolous.
If a consumer can show that a furnisher or a CRA violated its obligations under the FCRA, the consumer may be entitled to recover damages suffered as a result, statutory damages and attorneys’ fees and costs. It is important for the individual to avoid pursuing claims that have no merit – are may be deemed frivolous. While chances of success are dependent on the evidence, an attorney will help protect the rights of the consumer.
