FACTA: Consumer May Dispute Directly to Furnisher

Administrator
Site Admin
Posts: 11757
Joined: Tue Jul 26, 2005 4:15 am

FACTA: Consumer May Dispute Directly to Furnisher

Postby Administrator » Sun Oct 02, 2005 7:32 pm

Consumers may dispute furnished information directly with the furnisher.

[[THIS NEW RULE IS DECEPTIVE; IF YOU DIRECT DISPUTE, YOU DO NOT ACQUIRE A PRIVATE RIGHT AND CAUSE OF ACTION IF THE FURNISHER OR THE BUREAU FAILS TO PROPERLY REINVESTIGATE AND REMOVE THE ERROR; YOU MUST ALWAYS DISPUTE TO THE CREDIT REPORTING AGENCIES AND SIMPLY "cc" YOUR DISPUTE TO THE LENDER-FURNISHER WHO IS THE SOURCE OF THE ERRONEOUS REPORTING]]

The prior version of the FCRA had no provision by which a consumer could dispute an inaccurate item of information directly with the furnisher; rather, the consumer had to dispute the item with the agency which the FCRA then required to notify the furnisher. The FCRA, prior to amendment by FACTA, required the furnisher to reinvestigate the item only upon receiving the agency’s notice, notice from the consumer was irrelevant and ineffective. Now a consumer may trigger a furnisher’s responsibility to reinvestigate by disputing the item directly with the furnisher where the circumstances of the dispute meet the conditions of to-be-prescribed regulations. The new provision specifically provides, however, that such a reinvestigation responsibility will not be initiated by a notice from or prepared by a credit repair organization, and furnishers need not respond to “frivolous” disputes (though the furnisher must notify the consumer within 5 business days that it considers the dispute frivolous, why it considers the dispute frivolous, and what information the consumer must provide to convert the dispute into one that will start a reinvestigation). The furnisher must investigate the dispute and report the results back to the consumer in the same time frame allowed agencies for reinvestigation. If the furnisher finds the information to be inaccurate the furnisher must correct the information with each agency to which the furnisher furnished the information. Like the pre-existing reinvestigation responsibilities that arise upon notice from an agency, states are preempted from regulating the subject matter of the provision; however, unlike those responsibilities, under this law it appears that consumers may not privately enforce this provision against furnishers.

To be safe, lawyers should not send these disputes but consumers should send their own disputes. One problem will be when information has previously been disputed but not properly investigated. The consumer will still need the relief, but the furnisher can consider a second investigation request frivolous and refuse to perform any new investigation. A significant concern is that this requirement only exists in §623(a), which has been interpreted to be free from enforcement by any private right of action against furnishers who simply refuse to comply. This should, however, not affect private enforcement under §623(b). State UDAP laws might also be a source to attach a remedy to violations of this duty.

Return to “FCRA Statute And Amendments: 15 U.S.C. 1681, et. seq.”

Who is online

Users browsing this forum: No registered users and 4 guests