What Furnishers Need To Know
The Fair Credit Reporting Act (FCRA) is designed to protect the privacy of consumer report information — sometimes informally called “credit reports” — and to guarantee that information supplied by consumer reporting agencies (CRAs) is as accurate as possible.
If you report information about consumers to a CRA — like a credit bureau, tenant screening company, check verification service, or a medical information service — you have legal obligations under the FCRA’s Furnisher Rule. Your responsibilities include:
furnishing information that is accurate and complete, and
investigating consumer disputes about the accuracy of information you provide.
The Federal Trade Commission, the Consumer Financial Protection Bureau, and the federal banking agencies have each published a Furnisher Rule. The rules are identical in substance. The FTC’s Rule is summarized here. If you are not subject to the FTC’s jurisdiction, contact your regulator about your obligations.
When you provide information to a CRA, you have obligations under the FCRA to ensure the accuracy of the information you furnish. As a rule, it’s illegal to report information that you know or believe is inaccurate. You have "reasonable cause to believe" that information is inaccurate if you have knowledge, other than allegations from the consumer, that would lead a reasonable person to doubt the accuracy of the information. FCRA Section 623(a)(1)(A) You may be exempt from this requirement if you give an address for consumers to report inaccurate information, but you cannot, under any circumstances, report information the consumer has told you is inaccurate if it is, in fact, inaccurate. FCRA Section 623(a)(1)(C)
Correct and Update Information
If you furnish information to a CRA on a regular basis and determine that any information you provided is inaccurate or incomplete, you must promptly notify the CRA and provide corrections or additions. Going forward, you must furnish only the correct information to the CRA. FCRA 623(a)(2)(B)
Furnishing Specific Items
The FCRA requires that if you furnish any information to a CRA, you must include any of the following items that are applicable to you.
Credit Limits — Usually, you must include a consumer’s credit limit among the information you furnish to a CRA
Disputed Information — Once a consumer disputes information, you may not report that information to a CRA without telling the CRA that the information is in dispute. FCRA 623(a)(3)
Closed Accounts — If you furnish information to a CRA on a regular basis, you must notify the CRA that a consumer has voluntarily closed an account the next time you send information that would normally include that account. This is important because some users of information may interpret a closed account as an indicator of bad credit unless you clearly disclose that the consumer, not the creditor, closed the account. FCRA 623(a)(4)
Delinquent Accounts — When you refer to an account for collection and notify a CRA that you have done so, you also must report the date of delinquency to the CRA within 90 days. The date of delinquency is the month and year the consumer's delinquency resulting in the referral began, see the examples below. FCRA 623(a)(5)(A)
If you are a debt collector furnishing information to a CRA about the accounts of a creditor, you must report the date of delinquency given to you by the creditor. FCRA 623(a)(5)(A) This "date of delinquency" determines how long the debt can be reported on a consumer's credit report. Generally, a CRA may report a delinquent debt for seven years from the date of delinquency. If the debt was discharged in bankruptcy, however, a CRA may report it for 10 years.
If the creditor didn’t report the date of delinquency, you have two options:
You may establish and follow reasonable procedures to determine the date from the original creditor or another reliable source, or
If you can’t determine the date, you may establish and follow reasonable procedures to ensure that the reported date of delinquency is a date before the account was referred to collection or charged off. FCRA 623(a)(5)(B)
Negative Information from Financial Institutions — If you are a financial institution (as defined in the Gramm-Leach-Bliley Act) that extends credit and regularly reports A negative information about your customers to a nationwide CRA (for example, Equifax, Experian, or TransUnion), you must notify your customers that you report such negative information. Examples of negative information include a customer's delinquencies, late payments, insolvency, or any form of default. FCRA 623(a)(7)(G)(i)
You must provide the notice either before you furnish the negative information or within 30 days of furnishing it. You may include the notice with a notice of default, a billing statement, or another item sent to the consumer, but you cannot send it with a Truth In Lending Act notification. The notices must be clear and conspicuous.
The Consumer Financial Protection Bureau has model disclosures at 12 CFR Part 1022, Appendix B, FCRA 623(a)(7).
Medical Information — If your primary business is providing medical services, products, or devices, and you, your agent, or your assignee reports information about consumers to CRAs, you must notify each CRA that you are a medical provider. FCRA 623(a)(9) This notice helps the CRAs comply with their FCRA duties with regard to the reporting of medical information. FCRA 604(g) For example, if the name, address, and telephone number of a medical information furnisher appears on a consumer report, the information must be encoded so it doesn’t identify the specific provider or the nature of the services, products, or devices. FCRA 605(a)(6)(A)
The federal banking agencies have issued rules to implement these requirements.
Consumers may dispute information that you furnished in two ways:
They may submit a dispute to the CRA.
They may submit a dispute directly to you.
Disputes to CRAs
If a CRA notifies you that a consumer disputes information you provided, you must:
investigate the dispute and review all relevant information provided by the CRA about the dispute; report your findings to the CRA;
provide corrected information to every CRA that received the information if your investigation shows the information is incomplete or inaccurate; and
modify the information, delete it, or permanently block its reporting if the information turns out to be inaccurate or incomplete or can’t be verified. FCRA 623(b)(1)
You must complete these steps within the same time allowed under the FCRA for the CRA to resolve the dispute. Normally, this is 30 days after the CRA gets the dispute from the consumer. If the consumer provides additional relevant information during the 30‑day period, the CRA has 15 more days to resolve the dispute. The CRA must give you all the relevant information it gets within five business days of receipt, and must promptly give you additional relevant information provided by the consumer. If you don’t investigate and respond to the notification of the dispute within the specified times, the CRA must delete the disputed information from its files. FCRA 623(b)(2) and 611(a)(1)
For more information regarding credit report issues, contact us 718-674-1245 or message here.