On November 10, the Consumer Financial Protection Bureau (CFPB) published a circular, stating that both consumer reporting agencies (CRAs) and furnishers may be held liable under the Fair Credit Reporting Act (FCRA) for failing to investigate disputes, including when they impose what the CFPB views as barriers to the submission of disputes. Specifically, the CFPB advised that federal and state consumer protection regulators, including attorneys general, can bring claims against companies that fail to appropriately investigate and resolve disputes.

Consumer reports are used to evaluate consumers’ eligibility for loans and the interest rates they pay, their eligibility for insurance and the premiums they pay, their eligibility for rental housing, and their eligibility for checking accounts, among other eligibility decisions. The FCRA requires that when CRAs and furnishers are properly notified of a dispute about information contained in a consumer file, both must conduct a reasonable investigation of the dispute.

Between January and September 2021, the CFPB received more than 500,000 complaints about credit reporting, with allegedly incorrect information on a consumer report serving as the most common issue consumers raise.

In noting this volume of complaints, the CFPB advised that regulators may consider bringing an action under the FCRA when furnishers or CRAs require consumers to provide documentation or proof documents, other than as described in the statute or regulation, as a precondition to initiating an investigation. Accordingly, CRAs and furnishers must reasonably investigate disputes they receive directly from consumers that are not frivolous or irrelevant — and furnishers must reasonably investigate all indirect disputes received from CRAs — even if such disputes do not include the entity’s preferred format, preferred intake forms, or preferred documentation or forms.

The CFPB also advised that regulators may bring a claim if a CRA fails to promptly provide to the furnisher “all relevant information” regarding the dispute that the CRA receives from the consumer. After a person disputes the accuracy or completeness of information in his or her consumer report, the CRA must notify the original furnisher of the information of the dispute within five business days. In addition, the CRA must give the furnisher all relevant information the consumer provided. The CFPB went on to state that while there is not an affirmative requirement to specifically provide original copies of documentation submitted by consumers to CRAs, it would be difficult for a CRA to prove it provided all relevant information if it fails to forward even an electronic image of documents that constitute a primary source of evidence.

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Photo of Tim J. St. George Tim J. St. George

Tim defends institutions nationwide facing class actions and individual lawsuits. He has particular experience litigating consumer class actions, including industry-leading expertise in cases arising under the Fair Credit Reporting Act and its state law counterparts, as well as litigation arising from data breaches.

Photo of David M. Gettings David M. Gettings

Dave is a partner of the firm who focuses on defending clients in consumer class actions and complex commercial litigation nationwide, particularly cases involving a variety of federal and state laws and regulations, including the Fair Credit Reporting Act (FCRA), the Telephone Consumer

Dave is a partner of the firm who focuses on defending clients in consumer class actions and complex commercial litigation nationwide, particularly cases involving a variety of federal and state laws and regulations, including the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA) and associated FCC regulations, the Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, and many similar state consumer protection statutes.

Photo of Stefanie Jackman Stefanie Jackman

Stefanie takes a holistic approach to working with clients both through compliance counseling and assessment relating to consumer products and services, as well as serving as a zealous advocate in government inquiries, investigations, and consumer litigation.

Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and state laws.

Photo of Ronald I. Raether, Jr. Ronald I. Raether, Jr.

Ron leads the firm’s Privacy + Cyber team. Drawing from nearly 30 years of experience, he provides comprehensive services to companies in all aspects of privacy, security, data use, and risk mitigation. Clients rely on his in-depth understanding of technology and its application

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Photo of David N. Anthony David N. Anthony

David Anthony handles litigation against consumer financial services businesses and other highly regulated companies across the United States. He is a strategic thinker who balances his extensive litigation experience with practical business advice to solve companies’ hardest problems.