Points of Correspondence Between the Inquiry Input and File

Maximum Possible Accuracy
David A. Szwak

Points of Correspondence Between the Inquiry Input and File

Postby David A. Szwak » Wed Oct 26, 2005 5:30 pm


Consumer reporting agency's failure to require at least a minimum number of "points of correspondence" between the actual consumer and the subject of the report violates reasonableness standard. Thompson v. San Antonio Retail Merchants Association, 682 F.2d 509 (5th Cir. 1982). See R. Smith, "A Look Inside a Credit Bureau's Operation," Privacy Journal, Vol.22, No.6, p.5 (April 1996).

David A. Szwak

Postby David A. Szwak » Mon Oct 31, 2005 9:04 pm

Thompson v. San Antonio Retail Merchants Assn., [1982, 5th Cir.] [Tex.] 682 F.2d 509,

The court held that a consumer credit reporting agency which programed its computer to automatically enter credit information into a consumer file without requiring any minimum points of correspondence between the file and the identifying information used to obtain the file, and which conducted only spot audits to verify the social security numbers of the consumers on whom it had credit files, had failed to comply with the reasonable procedure requirements of 1681e[b]. The reporting agency provided a service by which its subscribers entered certain identifying information from their own computer terminals into the agency's central computer to gain access to the credit history of a particular consumer. When a subscriber's terminal operator requested a file, the computer automatically entered into the file any new information entered by the operator in the process of obtaining the file. An operator mistakenly accepted the file of William Daniel Thompson, Jr., as that of credit applicant William Douglas Thompson III. Thus, the computer automatically entered various information about the applicant, including his social security number, into the Jr. file. The file, which did not contain Jr.'s social security number, correctly stated that he had a delinquent account charged off as a bad debt. With the entry of the applicant information supplied by the operator, the file contained the name, former address, and former employer of Jr. and the social security number, current address, current employer, and wife's name for the applicant. A subscriber requested a revision of the file, a procedure which entailed rechecking information in the file. Under its usual procedure, the reporting agency would have phoned the creditor who had written off the delinquent account, to verify, in detail, the information in the file. If this was done, the person who did it apparently failed to check the social security number of the delinquent customer or to take corrective action, if it was discovered to differ from the number in the credit file. Therefore, the adverse information remained in the file under the applicant's social security number. The court said that 1681e[b] imposes a duty of reasonable care in report preparation, which extends to updating procedures, because preparation of a consumer report should be viewed as a continuing process. The agency manager testified that the social security number is the most important information in a consumer credit file, and that an agency employee should have phoned the creditor to verify the social security number, among other information, listed in the file. The court said that the agency acted unreasonably by programing its computer to automatically enter information into a file without requiring any minimum number of points of correspondence and by failing to verify the social security number.

Return to “Front End Duties of the Credit Reporting Agencies: 15 U.S.C. 1681e(b)”

Who is online

Users browsing this forum: No registered users and 2 guests