January 21, 2025

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against a nationwide consumer reporting agency (CRA). According to the CFPB, the CRA allegedly neglected to perform suitable investigations of consumer reports.

The CRA allegedly failed to take the necessary steps to intake disputes, investigate them, and notify customers of the results per the Fair Credit Reporting Act (FCRA). The CFPB claimed that failing to remove incorrect information from consumer reports could limit one’s ability to find employment, housing, and credit. According to the CFPB’s Director Rohit Chopra, “Credit reporting errors can have serious consequences for a family’s finances, and it is critical that credit reporting giants follow the law.”

The agency involved is a nationwide CRA that reports information on most families in the United States. The CRA collects this information from data furnishers such as banks, credit providers, and debt collectors. After gathering this information, it markets and sells the various types of consumer data. These include credit reports, scores, and third-party information. Employers, creditors, housing providers, and others use these products to make educated decisions.

The FCRA requires consumer reporting agencies to follow specific procedures to ensure maximum accuracy in consumer reporting. This requirement includes conducting investigations of information disputed by consumers. Federal law provides consumers several channels for disputing inaccurate information, including contacting the CRA directly. CRAs must follow several procedures before reinserting disputed information into a report.

According to the CFPB, the CRA committed several FCRA violations. These violations include the following:

Failure to conduct appropriate investigations: The CRA did not maintain suitable procedures to intake investigations while communicating all information needed for the original furnisher to respond. Furthermore, the CRA routinely accepted responses from data furnishers despite existing data pointing to some furnishers as unreliable and some information appearing improbable. Following this, the CRA allegedly sent consumers insufficient notices to inform them of the investigation’s results.

Reinserting inaccurate information: The CFPB claimed that the CRA failed to implement suitable tools to identify when a new furnisher has submitted a previously deleted tradeline. As a result, the lawsuit claims that the CRA reinserts inaccurate information into consumer reports.

This lawsuit is one recent example of the CFPB’s continued focus on enforcing compliance with the FCRA. This focus includes ensuring CRAs guarantee maximum accuracy in consumer reporting. As such, the CFPB stressed that users of consumer reports should review their processes to ensure compliance with the FCRA. One way is working with trusted screening providers who routinely review and update their processes to comply with all applicable laws.

Stay updated on all the new FCRA, EEOC, and other compliance laws with JDP. Contact a Sales Rep today for more information.

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