There is a common theme to the three questions posed by members of the accounts receivable management industry to our credit reporting expert — Alicia Mckeighan, the Chief Compliance Officer at Afni — in the next episode of “Ask The Credit Reporting Expert” and that common theme is one that is at the core of many conversations these days — the circumstances under which tradelines may or may not be deleted.
The questions posed this week are:
- Once a consumer account is paid in full, can the debtor with the creditor’s help or support speed up the process of removing the record from the report?
- If a consumer is disputing that an account paid off 7+ years ago but previously charged off account is still appearing a recent credit report, specifically for Equifax and TransUnion – can the FTC or CFPB force either or both credit agencies to delete this tradeline?
- The practice used to be for some that they would use credit reporting to drive calls, and as soon as a collector got a credit dispute, or a dispute of any kind, especially on a low dollar account, the collector would immediately stop credit reporting, send a letter explaining that the collector was no longer collecting on the account, put the account on hold to no longer collect on it, and make arrangements to return it to the creditor. If a collector were to try to adhere to the ‘old’ process as much as possible, what if any particular documentation do you need to provide as part of the return to the creditor and as part of the credit reporting? What CFPB enforcement actions, regulatory pronouncements, case law, etc., inform you regarding your description of what the new process should entail?
For Mckeighan, the upshot of her answers is that furnishers need to have policies and procedures in place to make it clear to consumers — and to regulators and plaintiff’s attorneys — that pay-for-delete is not an option, and that if companies want the benefits that go along with credit reporting, then they have to also accept the requirements that go along with doing so and tradelines just can’t be deleted if a dispute is filed.
“I would strongly recommend that any form of this practice is heavily scrutinized,” Mckeighan said. “The FCRA states that upon receipt of the consumer’s dispute from a CRA, that the furnisher of information will investigate it, will review the relevant information, report the results of the investigation and modify, delete, or block reporting if it’s determined to be inaccurate, incomplete or unverifiable. So the only the only provision in the FCRA that allows you to delete is if it’s inaccurate. The FCRA is pretty much crystal clear about when deletions are appropriate. So I would I would discourage this practice. I would look at the FCRA bulletins, the CFPB bulletins on the FCRA, and look at the supervisory highlights. You can certainly craft different ways to respond to disputes in different scenarios but this policy as a blanket, ‘If I get a dispute, I’m going to delete and not investigate.’ You really need to take a look at that.”
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