CFPB Issues Statement on Obligations of Credit Reporting Companies and Providers Under FCRA | PC Weiner Brodsky Kider
The CFPB recently released a statement regarding credit reporting companies (i.e. credit reporting agencies or “CRAs”) and providers and their legal obligations under the FCRA. Specifically, the CFPB said credit rating agencies and providers are required to ensure that reported consumer information is both “legally” and “factually” accurate.
In two active cases, one against a CRO and the other against a supplier, the CFPB has filed amicus briefs in support of the Bureau’s position that CROs and suppliers must ensure that consumer information reported does not contain any “legal” or “factual” inaccuracies. In the case against the CRA, a consumer sued the CRA for violating the FCRA by allegedly not having put in place reasonable procedures to ensure that the information on the consumer report was accurate . The consumer claims that the CRA indicated in her credit report that she owed a certain amount on a car lease that she did not in fact owe under the terms of her lease. The CRA argued that it did not err because the error was “legal” rather than “factual”. The CRA also argued that the information was not inaccurate since it was provided by the company that financed the lease. In the amicus brief, which was filed jointly by the CFPB and the FTC, the agencies said that whether the error was “legal” or “factual,” the CRA must follow reasonable procedures to avoid statements. inaccurate and noted that the FCRA does not exempt from “legal” inaccuracies.
In the other case, a consumer, victim of identity theft and having numerous accounts opened in her name, sued a credit provider for having reported inaccurate information to the CRAs even though the consumer had disputed these informations. The consumer alleges that after disputing the information with the provider, the latter continued to report the account in question to the CRAs. The supplier argued that the error was “legal” rather than “factual”, which should exonerate the supplier from liability. In its amicus brief, the CFPB noted that the provider has an obligation under the FCRA to reasonably investigate the disputed information, whether the dispute qualifies as a “legal” or “factual” issue.