The Consumer Financial Protection Bureau (CFPB) issued an advisory this week affirming that neither consumer reporting companies nor information furnishers can avoid dispute investigation requirements.
When people identify inaccurate information on their consumer reports, they can dispute it with the consumer reporting company. However, consumer reporting companies are required to conduct complete investigations. The bureau has found that consumer reporting companies and some furnishers have failed to conduct reasonable investigations of consumer disputes. These failures can impact an individual’s eligibility for loans and interest rates, for insurance, and for rental housing and employment.
“One wrong piece of information on a person’s credit report can have destructive consequences that follow a consumer for years,” CFPB Director Rohit Chopra said. “Companies that fail to properly address consumer disputes in accordance with the law may face serious consequences.”
The CFPB has found that these companies don’t always live up to their investigatory responsibilities. In some cases, the CFPB found consumer reporting companies ignored the results of their investigations. Inaccurate information and failures to investigate are the two most common complaints received by the CFPB.
The CFPB points out that consumer reporting companies and furnishers may be liable under the Fair Credit Reporting Act if they fail to investigate relevant disputes, and claims can be pursued by both state and federal consumer protection enforcers and regulators.
Specifically, the consumer reporting companies must promptly provide the furnisher with all relevant information regarding a person’s dispute. Further, they may not limit a person’s dispute rights, meaning they must reasonably investigate disputes received directly from individuals.