Consumer Financial Protection Bureau (CFPB) Issues Guidance for Reasonable Investigation of Consumer Reporting Disputes

The Consumer Financial Protection Bureau (CFPB) – a United States government agency that enforces the federal Fair Credit Reporting Act (FCRA) – has issued guidance for “Reasonable Investigation of Consumer Reporting Disputes” to affirm that consumer reporting companies and information furnishers cannot skirt dispute investigation requirements. “The CFPB 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,” according to a news release about the guidance. These failures can affect – among other things – a consumer’s eligibility for employment. Consumer reporting companies are required to investigate all disputes that are not frivolous or irrelevant and may be liable under the FCRA if they fail to investigate relevant disputes. Claims can be pursued by both state and federal consumer protection enforcers and regulators. Specific responsibilities for the investigations include:

• 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. In addition, the consumer reporting company must give the furnisher all relevant information provided by the individual.
• 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. For furnishers, they must reasonably investigate all indirect disputes received from consumer reporting companies. These requirements remain in place even if a person does not include or use the entity’s preferred format, intake forms, or documentation.

When consumers identify inaccurate information on their consumer report, they can dispute it with the consumer reporting company, but that right is dependent on consumer reporting companies and furnishers conducting complete investigations. The CFPB’s supervisory exams suggest these companies do not always live up to their investigatory responsibilities. The CFPB found some consumer reporting companies ignored the results of their investigations and simply deleted disputed tradelines instead of correcting inaccurate information. Consumer complaints received by the CFPB highlight similar problems. Inaccurate information and failures to investigate are the two most common consumer reporting complaints. ClearStar is a leading Human Resource technology company specializing in background checks, drug testing, and occupational health screening. ClearStar offers FCRA-compliant background checks of job applicants that empower employers to make smarter hiring decisions. For more information about background checks, contact ClearStar today. © 2022 ClearStar. All rights reserved. – Making copies of or using any part of the ClearStar website for any purpose is prohibited unless written authorization is first obtained from ClearStar. ClearStar does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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