The Consumer Financial Protection Bureau (CFPB) has issued a warning to the data furnishers that provide consumer credit information to the credit bureaus, namely Equifax, TransUnion and Experian, regarding their responsibility to investigate consumer credit report disputes, as per the requirements of the Fair Credit Reporting Act.
Specifically, the CFPB released a bulletin stressing that data furnishers (typically creditors, lenders, utilities, debt collection agencies and the courts) are responsible for investigating consumer disputes forwarded by the credit bureaus. Data furnishers are also responsible for reviewing all relevant information provided with the disputes, including documents submitted by consumers.
In addition, the credit bureaus must report the results of any investigation to the consumer or other entity that made the original complaint. In addition, each furnisher, working with the credit bureaus, is responsible for correcting inaccurate information.
The action is relevant to the mortgage industry in that credit scores continue to be a primary factor in determining borrowers' ability to repay.
‘Credit reports play a critical role in the lives of consumers,’ says CFPB Director Richard Cordray, in a statement. ‘Given the importance of these reports, consumers need to know that their documents are being reviewed when they dispute what they believe is a mistake on a report. Today's bulletin helps ensure that the right people will be doing just that.’
Should one of the three credit bureaus receive a complaint from a consumer regarding inaccurate information on their credit report, the credit bureau must inform the data furnisher that the consumer has filed a complaint. The credit bureau is also required to forward all relevant information it has about the dispute to the data furnisher. Once the furnisher receives the information, it must review it, conduct an investigation and respond to the credit bureau.
The CFPB reports that the electronic system that the credit bureaus use for sending complaints to furnishers, known as e-OSCAR, now supports the exchange of documents, whereas previously it did not. The CFPB reports that it will continue to work with related parties to expand the capabilities of the e-OSCAR system.
If it is determined that a furnisher has engaged in any acts or practices that violate the Fair Credit Reporting Act or other federal consumer financial laws, the CFPB will take appropriate supervisory and enforcement actions to address violations and seek all appropriate corrective measures, possibly including restitution to harmed consumers, the agency says in a press release.