Often times creditors attempt to collect debt passively by making an entry on a client’s credit report. Below is a Blog post from Krumbien Legal Services regarding the Fair Credit Reporting Act.
The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.
CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act
All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.
The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.
The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.
As usual, we start with the statute. Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.
This section requires the consumer credit reporting agencies to have procedures if they are unable to verify information, or if they discover that information is inaccurate.
It requires that the information that they cannot verify be deleted or changed, and that information that is inaccurate be changed or deleted.
An example of unverifiable information is where the furnisher of the information provides information that a person has failed to make certain payments (ie: been late) on a debt, but is unable to provide the records that show that the person has not made those payments.
In this case, the consumer credit reporting agencies must remove the information that the person has failed to make those payments. They have to report that the person is current.
Another example of inaccurate information is an account created by identity theft. Clearly, it is not accurate to report that a person owes money to a certain creditor when that account was opened by someone else. In this case, they must delete the inaccuracy, and remove all reference to this account.