Overview
The CFPB issued guidance emphasizing closer oversight of consumer dispute processes. When consumer reporting companies and furnishers fail to investigate disputed information, consumers are left paying higher interest rates and face greater difficulty finding housing and employment.
The CFPB’s Circular 2022-07 outlines how consumer protection enforcers can bring claims against companies that neglect to investigate and resolve consumer report disputes. This affects not only major credit bureaus but also any organization that furnishes data to these agencies.
Key Definitions
Consumer Reporting Agencies (CRAs) are defined under the Fair Credit Reporting Act (FCRA):
- 603(p) CRAs: Experian, TransUnion, Equifax, and Innovis, nationwide agencies that maintain consumer files containing public records and credit account information
- 603(f): Any entity assembling or evaluating consumer credit information for furnishing reports to third parties
- 603(x) Nationwide Specialty CRAs: Agencies compiling files on medical records, tenant history, check writing history, employment history, or insurance claims
Furnishers are entities providing consumer information to CRAs for inclusion in consumer reports, including banks, credit card companies, collection agencies, and debt buyers.
Duties to Investigate Disputes and Correct Information
Under FCRA Section 611, both credit reporting agencies and furnishers must investigate consumer disputes and correct inaccurate information.
Consumers may dispute any item on their credit report. While frivolous disputes, the same dispute repeated after proven correct, have exceptions, the reinvestigation process and timelines generally apply universally.
When disputes come directly to collection agencies or creditors regarding credit report items, directing consumers to file with CRAs is suggested, though creditors should still address consumer concerns.
Furnishers must promptly provide verification of disputed information. Failure to adequately verify may result in removal.
Dispute Reinvestigation Process
- CRAs must conduct a reasonable reinvestigation, reviewing their own records and contacting relevant furnishers
- Furnishers receive notification within 5 days of dispute receipt
- A 30-day deadline applies from dispute receipt to completion; failure to meet this results in removal
- The 30-day period extends if consumers provide additional relevant information
- Disputed items must be marked as disputed on credit reports
- Incorrect items are corrected or removed; unverifiable items are removed
- Consumer notification must occur in writing within 5 days of reinvestigation completion, detailing deletions, retained information, and the reinvestigation process
- If information is deleted, entities receiving the consumer’s report during the previous 2 years (employment) or 6 months (other purposes) must be notified
- Consumers may add dispute statements to their file if they disagree with completed reinvestigations showing information as correct
Having Processes in Place
The CFPB’s November 2022 circular emphasizes timely dispute responses and proper reinvestigation procedures.
eOscar, an electronic, Metro 2-compliant system developed by Equifax, Experian, TransUnion, and Innovis, serves as the primary browser-based platform for furnisher dispute responses. Most data furnishers subscribe to efficiently respond to disputes.
Establishing robust dispute response processes ensures CRAs receive reinvestigation results promptly, maintaining accurate and current consumer credit reports.
Working with Compliance Partners
NeuAnalytics bridges creditor-agency communication while maintaining regulatory compliance. The integrated platform tracks historical collection information across agencies, manages disputes regarding unpaid debt balances, automates dispute responses, and documents all interactions for audit readiness.
The platform enables creditors to build automated workflows, create remediation plans, and achieve documented compliance. Creditors using NeuAnalytics experience significant reductions in the time it takes to close open cases and can achieve exceptional pass rates for OCC, CFPB, and FDIC audits.
NeuAnalytics manages ongoing regulation monitoring to address federal and state variations, reducing compliance risks and vicarious liability exposure from non-compliant third parties.
