On November 10, 2022, the CFPB issued a circular to affirm that neither consumer reporting companies nor information furnishers can skirt dispute investigation requirements. The circular outlines how federal and state consumer protection enforcers, including regulators and attorneys general, can bring claims against companies that fail to investigate and resolve consumer report disputes.
According to the CFPB’s press release, the Bureau has found that consumer reporting companies and some furnishers have failed to conduct reasonable investigations of consumer disputes and to spend the time necessary to get to the bottom of inaccuracies. The CFPB even found that in some cases, consumer reporting companies ignored the results of their investigations and simply deleted disputed tradelines instead of correcting inaccurate information. In addition to these findings, inaccurate information and failures to investigate are the two most common consumer reporting complaints received by the CFPB. According to the CFPB, these failures can affect people’s eligibility for loans and interest rates, for insurance, and for rental housing and employment.
In light of these findings, the CFPB issued guidance to assert that consumer reporting companies are required to investigate all disputes that are not frivolous or irrelevant and that companies and furnishers may be liable under the Fair Credit Reporting Act if they fail to do so. The guidance specified the responsibilities for the investigations as follows:
Consumer reporting companies must promptly provide to the furnisher all relevant information regarding a person’s dispute. After a person disputes the accuracy or completeness of information in their file, the consumer reporting company must notify the entity that originally furnished the information within five business days and provide all relevant information.
Consumer reporting companies and furnishers may not limit a person’s dispute rights. Consumer reporting companies and furnishers must reasonably investigate disputes received directly from individuals, even if a person does not include or use the entity’s preferred format, intake forms, or documentation.
Read the CFPB’s press release here.
The circular can be found here.