COVID-19 has forced us to ask novel questions generally and look for stay-at-home order workarounds. Compliance with the Fair Credit Reporting Act (FCRA) is no different. One of the many questions that has arisen relates to the reinvestigation of disputed court records. How can this be done with limited access to court records? What should be done to permit reporting of these records once access restrictions are lifted?

Since the start of the COVID-19 outbreak, many state and federal courts have restricted their activities to only core functions. As a result, courts have continued trials and other hearings and limited, or in some instances prohibited, public access to courthouses. Due to such restrictions, along with state stay at home orders, accessing public records – such as those used to in a consumer report – has been increasingly difficult. But court records are public records, right? And screening of essential workers (such as healthcare and ride-share drivers) should also be essential?

States seem to have addressed these unprecedented restrictions on public record access in varying ways. In Washington, for example, the Governor temporarily waived certain portions of the state’s Public Records Act. These changes limit the ways local agencies must accept public record requests, allowing them to only accept mail or emailed requests. In Louisiana, the Attorney General issued guidance stating that all legal deadlines under the Louisiana Public Records Act would be suspended until the end of the Public Health Emergency. In Burbank, California, the city “determined that responding to Public Records Act (PRA) requests within the statutory time frames are not essential services.” While the city is still accepting requests via email, it cautions that requests will be significantly delayed. Even in places where public offices remain open there has been a delay in response times, with many local agencies advising that delays are to be expected as staff are working from home.

These new realities can impact a company’s ability to meet its compliance obligations under the FCRA. This includes the FCRA requirement that if a consumer disputes information on a consumer report, the consumer reporting agency must reinvestigate the disputed information.[1] If an item of information is found to be inaccurate, incomplete, or cannot be verified then the consumer reporting agency (CRA) must promptly delete the item (or modify the item, as appropriate).[2]

When can an item not be verified?

The FCRA does not specifically define what it means for an item to be unverifiable. The Federal Trade Commission, in its “40 Years of Experience with the Fair Credit Reporting Act” report notes that:

A CRA responding to a dispute must make a good faith effort to determine the accuracy of the disputed item or items… In [certain] cases, the CRA must conduct a “reasonable” investigation that, at a minimum, would include checking with the original sources or other reliable sources of the disputed information and inform them of all relevant information and evidence submitted by the consumer as part of his or her dispute, state the consumer’s position, and then ask whether the source would confirm the information, qualify it, or accept the consumer’s explanation.[3]

The FTC gives similar guidance with respect to a “furnisher’s” obligation to investigate a dispute:

The furnisher’s investigation must be reasonable under the circumstances. It may be either simple or complex, depending on the nature of the dispute.…Unless the furnisher is able to confirm the disputed item of information, it must cease reporting it.[4]

Courts have previously opined that if disputed information cannot be verified it means that a source must have “reasonably determined that further investigation would be fruitless or unduly burdensome.”[5]

Depending on the nature of the disputed item, courts may be the only, or the most reliable way, to verify a disputed piece of information. But, in light of COVID-19, limited or prohibited access to public records may mean that the CRA is unable to check with the original source. Companies should continue to submit requests for public records (or begin doing so), securing their place in the queue and if possible, pushing for a response within 30 days. Even in locations where agencies and courts are delayed in responding, filing a request now should position the company to receive a request as early as possible and defend against possible criticism.

Anticipating an ultimate delay beyond 30 days, the question for CRAs therefore becomes how to handle such circumstances during this pandemic, and, when government agencies comply with public record access laws again, whether a CRA can reinsert accurate information.

Reinsertion under the FCRA.

Under the FCRA, if a CRA wishes to reinsert information previously deleted from a consumer’s file as a result of a consumer dispute because it was found to be inaccurate, incomplete or could not be verified, the “person who furnishes the information” must first “certif[y] that the information is complete and accurate.” 15 U.S.C. § 1681i(a)(5)(B).

With respect to the phrase “person who furnishes the information,” some argue that this provision applies only to “furnishers” regulated under Section 623 of the FCRA (15 U.S.C. § 1681s-2). Accordingly, only information provided by a “furnisher” can be reinserted under 1681i(a)(5)(B). But this interpretation is unnecessarily narrow because it excludes other entities that “furnish” information to CRAs and draws a distinction not supported by the legislative history of the FCRA.

Other entities, apart from a Section 623 furnisher, can “furnish” information (under the common dictionary meaning of “furnish”[6]). For example, CRAs themselves furnish information as do “sources of information” under Section 609 of the FCRA (15 U.S.C. § 1681g). Vendors that transmit public record information to the CRAs likewise “furnish” these records. These vendors do not have a relationship with or transact business with the particular consumer that is the subject of the report. Rather, a vendor simply transmits data from public sources. In contrast, a Section 623 furnisher arguably must have a relationship with a consumer.[7]

In addition, many of the obligations placed on Section 623 furnishers were enacted as part of the 2003 FACT Act amendments to the FCRA. The Section 611 reinsertion provision was codified before that time, indicating that legislators did not intend to limit the reinsertion provisions to only furnishers governed by Section 623.

Accordingly, while some may argue that public records cannot be reinserted because there is no Section 623 furnisher for public records, that interpretation is an unnecessarily narrow reading of the language in the reinsertion section of the FCRA. Taking such a position could lead to the illogical result that an accurate public record could be excluded from a consumer report forever, even if accurate.

What steps should a CRA consider?

We outline below different approaches companies can consider with respect to reinserting information. Each approach carries its own advantages and disadvantages.

Approach 1: Rather than remove the item as the result of a dispute, a CRA may want to consider reaching no definitive conclusion as to the consumer’s dispute. The CRA would still remove the record, but the removal would not be as a result of the dispute. This would accurately reflect that a CRA is unable to adequately assess the information, for instance if the courthouse is closed and a record cannot be reviewed. As the information would not be removed as the result of a dispute, the FCRA’s reinsertion requirements arguably would not apply, and a CRA would be free to add the information back into the report, without going through the certification process required for reinsertion. This argument, however, requires that a court or agency closure, resulting in the inability to access public records, would not result in an unverified piece of information (as that result is accounted for under the FCRA dispute provisions). Rather, the CRA would need to treat the information as merely inaccessible (i.e., in a different fashion than standard disputed information).

Approach 2: Following the argument explained above, that there are other entities who “furnish information” beyond a Section 623 furnisher, a CRA could look to a vendor to certify the information in dispute. While this is perhaps the simplest solution, the difficulty for a CRA lies in the details of how to meet the statutory requirement of a certification that the information is “complete and accurate.”[8] The FCRA does not define what constitutes a proper certification, nor does the FTC’s 40 Years’ report comment on this question. Arguably a vendor, or other source, would be able to attest to the fact that a public record was obtained on X date and contains Y information. If a CRA is able to include public record information from a vendor in a consumer report, then it follows that a vendor should be able to certify to that the public record is complete and accurate.

Approach 3: A company could also consider looking to a different source for the same information in question. First, check your agreement with the vendor for any reference to Section 623. If none exists, and the company is still concerned that the requirements of § 1681i(a)(5)(B) are limited to Section 623 “furnishers,” the CRA could ask the vendor to retrieve the information from a different public record access point. The CRA can then argue that there was no “reinsertion” since the information is coming from a new source. Indeed, the new source would in essence be certifying the accuracy of the record in supplying it to the CRA, mitigating any policy arguments that might be used to attack this approach.

The CRA also could consider using use a different vendor or decide to go to court or public record access point directly. While this option may be viable for information that is tracked in multiple places or by multiple agencies, it will be difficult for companies to use this option if a piece of data is only available in one location that is currently unavailable due to COVID-19 closures. The impact of government closures is not limited to certain vendors or access points, and so all sources may have similar difficulties in obtaining records to verify information.

If the decision is made to rely on § 1681i(a)(5)(B), then the FCRA requires that the CRA take certain steps.[9] Initially, the CRA should develop a process to identify dispute investigations and conclusions that are not affected by COVID-19 – and use their existing policy and procedures. In all instances where reinsertion is at issue, the CRA will need ensure that it complied with the following:

  • Before the CRA reinserts the information into the file, the person who furnishes the information must certify that the information is complete and accurate; and
  • No later than five business days after reinserting the information, the CRA must notify the consumer of the reinsertion in writing (unless the CRA was previously authorized by the consumer to notify them by other means). The notice must include:
    1. A statement that the disputed information has been reinserted;
    2. The business name, address and telephone number of any furnisher of information that contacted the CRA, in connection with the reinsertion of such information; and
    3. A notice that the consumer has the right to add a statement to the consumer’s file disputing the accuracy or completeness of the disputed information.

COVID-19 presents many novel issues for CRAs and all of us to address. The issue of reinsertion under these uncertain times is uncharted territory for CRAs, without statutory guidance. CRA’s must chose an option in a thoughtful manner with consideration to how a regulator or consumer attorney might challenge the decision. This analysis requires the consideration of numerous issues that may be unique to each CRA and possibly a public record access point or source. Troutman is prepared to help guide those through this process that require assistance.

 


 

[1] 15 U.S.C. § 1681i(a)(1).

[2] 15 U.S.C. § 1681i(a)(5)(A).

[3] Fed. Trade Comm’n, 40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations 75-76, § 611(a) at Comment 2.

[4] Id. at 96, § 623(b), Comment 2.

[5] Hinkle v. Midland Credit Mgmt., Inc., 827 F.3d 1295, 1304 (11th Cir. 2016)

[6] See e.g., “Furnish”, Merriam-Webster.com. 2020. Available at https://www.merriam-webster.com (“to provide with what is needed”).

[7] See 15 U.S.C. § 1681s-2(a)(2)(A) (“A person who regularly and in the ordinary course of business furnishes information to one or more consumer reporting agencies about the person’s transactions or experiences with any consumer”) (emphasis added).

[8] 15 U.S.C. § 1681i(a)(5)(B)(i).

[9] 15 U.S.C. § 1681i(a)(5)(B).