CFPB Publishes Guidance Addressing ‘Shoddy’ FCRA Dispute Investigation Practices by Furnishers, CRAs

The Consumer Financial Protection Bureau yesterday issued guidance that warns furnishers of information to credit reporting agencies — and the agencies themselves — about the perils of not conducting reasonable investigations when consumers submit disputes about items on their credit reports.

Credit reporting agencies must promptly notify furnishers and provide all relevant information when a consumer files a dispute, the CFPB noted, and neither a credit reporting agency nor a furnisher may limit a person’s dispute rights, such as in situations where the preferred format, intake forms, or documentation are not used.

Furnishers and credit reporting agencies are not permitted under the Fair Credit Reporting Act to impose obstacles that deter the submission of disputes, the CFPB said. Those obstacles can be in the form of requiring consumers to provide a recent copy of their credit report before investigating a dispute, or furnishers requiring the submission of additional documentation even when the consumer has already provided the supporting documentation or other information reasonably required to substantiate the basis of a direct dispute. Nor can credit reporting agencies or furnishers require consumers to attach a completed proprietary form before investigating a dispute.

The CFPB is cracking down on credit reporting issues because that has become the largest category of complaints filed by consumers with the Bureau in the past two years. The number of credit reporting complaints more than doubled to 700,000 in 2021, from 2020, according to data provided by the CFPB.

“One wrong piece of information on a person’s credit report can have destructive consequences that follow a consumer for years,” said CFPB Director Rohit Chopra, in a statement. “Companies that fail to properly address consumer disputes in accordance with the law may face serious consequences.”

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