FCRA Expert Talks About What Makes an Investigation ‘Reasonable’

When a consumer disputes an item on his or her credit report under the Fair Credit Reporting Act, the furnisher is required to conduct a “reasonable” investigation to ensure the information being furnished is accurate. But, as many furnishers have come to learn, what constitutes a “reasonable” investigation is often left up to a judge to determine.

In the latest episode of “Ask the Credit Reporting Expert” Xerxes Martin from Malone Frost Martin tackles that question and others, including an inquiry about the impact of the Hunstein ruling on credit reporting.

EDITOR’S NOTE: Coming Friday, May 21 is a whole webinar dedicated to discussing what constitutes an investigation under the FCRA. Sign up by clicking here.

In the video, Martin talks about what he has learned by defending a number of FCRA investigation cases recently, especially from the questions that the attorneys representing the plaintiffs ask during depositions. “You really see kind of the narrative that they’re trying to build, and what you can do to have policies and procedures to combat that narrative,” Martin says during the episode. “That narrative is, ‘These people are spending a few minutes on each of these disputes, they’re looking at documents on a computer, and they may or may not be doing anything else.’ And so they’re trying to build a narrative that this is just a well-oiled machine that validates every single dispute that comes in and just doing a simple, ‘Okay, it’s disputed, update credit reporting, and move on.’ “

Martin lays out some ideas and principles to help furnishers build policies and procedures to help fight that narrative that consumer attorneys are pushing when filing FCRA lawsuits.

In the episode, Martin also tackles how to handle a request from an individual who co-signed for a loan or other type of credit, and the impact of the Hunstein ruling on credit reporting.

See previous episodes of Ask The Credit Reporting Expert here. Have a credit reporting question you want to get answered? Fill out this form.

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