11.12.15 by Andrew Shafer

FCRA DO'S AND DON'TS.

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          The Fair Credit Reporting Act imposes limited obligations on credit information furnishers.  15 U.S.C. §1681s-2 is the section of the law that governs credit furnishers (those of you who credit report Consumers).  The rules are as follows:

          The law prohibits you from reporting inaccurate information if you know, or reasonably should know, that it is inaccurate.

          If you furnish information and the consumer advises you that it is inaccurate, you are obligated to correct the record if you have “in fact” reported inaccurate information.  This really requires the consumer to provide you with documentation to substantiate the error (such as a bank statement showing payment).

          If you know the consumer disputes the debt, you can report it, but must also report the debt as a disputed debt.

          15 U.S.C. §1681s-2(b) provides the rules for what you must do if a consumer disputes a debt with a CRA.  Once the credit furnisher receives notice of the dispute from the CRA, it must, within thirty days:

                    -  Conduct an investigation regarding the dispute;

                    - Review all information provided by the consumer with its notice;

                    - Complete the investigation and report the results to the consumer after receiving notice of the dispute;

                    - If the investigation confirms the inaccuracy of information, “promptly notify” the CRA by providing all information necessary to correct the inaccuracy.

          15 U.S.C. §1681s-2(c) limits a credit furnisher’s liability. First, the only time a furnisher has exposure under the FCRA is if it fails to conduct the investigation required by 15 U.S.C. §1681s-2(b).  Even though consumers and their attorneys rattle sabers about incorrect reporting, 15 U.S.C. §1681s-2(c) and (d) exclude private remedies.  Note, however, if you intentionally furnish incorrect information, you are liable under the FDCPA.  15 U.S.C.§1692e(8) [communicating or threatening to communicate any credit information which is known to be false, including failure to report a debt as disputed when the furnisher knows or has reason to know the debt is disputed].

          From time to time, we have seen credit furnishers misidentify the date of delinquency as the date on which the account was placed with the agency.  This is wrong.  The correct date is the date of delinquency of the account.  15 U.S.C. §1681s-2(a)(5)(A).  If a furnisher cannot obtain the date of delinquency it must employ reasonable measures (whatever that means!) to determine the date of delinquency from sources other than the creditor. If that is not possible, then the furnisher must establish and follow a consistent internal policy to insure that the date of delinquency precedes the date of placement [for example, the date of delinquency is the date 180 days before the placement].

          Finally, 15 U.S.C. §1681c(c)(1) provides that accounts placed for collection must be removed from a credit report 7 years plus 180 days after the delinquency date.

          Consumer’s  Remedies under FCRA

          The FCRA does not create any right of action for violating 15 U.S.C. §1681s-2(a).  In fact, sub-section (c) makes it clear that no private action exists. The FCRA does create a remedy for violating §1681s-2(b) [the duty to investigate and correct errors].  If the violation is merely negligent, the law allows any actual damages sustained in addition to reasonable attorney’s fees and costs of suit.  15 U.S.C. §1681o.  If the violation of 1681s-2(b) is willful, then in addition to actual damages, attorney’s fees and court costs, the plaintiff is entitled to statutory damages of not less than $100 nor more than $1000 plus punitive damages that the court, in its discretion, awards.