The Consumer Financial Protection Bureau yesterday issued an advisory opinion reminding furnishers of information to the credit reporting agencies about the importance of insuring that the information being furnished is accurate and not “junk” data.
The volume of consumer complaints about inaccuracies in their credit reports, combined with the results of a nationwide survey finding that 34% of consumers identified at least one error in their credit reports seems to be the impetus for the CFPB to issue this guidance.
Furnishers have a legal requirement to follow reasonable procedures to assure maximum possible accuracy of the information concerning furnished to credit reporting agencies, and should be screening for and eliminating “logical” inconsistencies. The CFPB provided a list of what it would consider to be logical inconsistencies.
- An account whose status is paid in full, and thus has no balance due but nevertheless reflects a balance due
- An account that reflects an “Original Loan Amount” that increases over time, an impossibility by definition
- Derogatory information being reported on an account, although that derogatory information predates an earlier report that did not include the derogatory information
- A Date of First Delinquency reported for an account whose records reflect no delinquency, such as through activity reflecting a current account (complete history of timely payments, $0 amount overdue) or through a current account status code
- A Date of First Delinquency that post-dates a charge-off date
- A Date of First Delinquency, or date of last payment, that predates the account open date (for non-collection accounts)
- Impossible information about consumers – for example, a tradeline that includes a relevant date, such as a date of account opening, account closing, date of last payment, or date of first delinquency, for an account that is in the future—an obvious impossibility— or for an individual account that either predates that consumer’s listed date of birth or that is so far in the past (e.g., January 1, 1800) that it must predate every living consumers’ date of birth, as individuals cannot open an account before they are born
- Information about consumer accounts that is plainly inconsistent with other reported information, such that one piece of information must be inaccurate – for example, if every other tradeline is reporting ongoing payment activity, while one tradeline contains a “deceased” indicator, reasonable policies and procedures should identify the inconsistency and the consumer reporting agency should prevent the inclusion of the inaccurate information in consumer reports it generates