Tag: frivolous disputes

FTC and CFPB File Amicus Brief Regarding Furnisher's Ability to Decline "Frivolous" Disputes September 30, 2022 The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have joined in filing an amicus brief with the U.S. Court of Appeals for the Third Circuit. This brief asks the Court of Appeals to overturn a lower court's decision. The lower court's decision would create limited exceptions under the Fair Credit Reporting Act (FCRA) for furnishers of credit information to decline to investigate certain consumer disputes. The amicus brief argues that these exceptions would undercut one of the FCRA's critical consumer protections. These protections allow individuals to dispute inaccurate information on their consumer reports and have it investigated and corrected. According to the Director of the FTC's Bureau of Consumer Protection, this brief rejects the argument that furnishers may, in some circumstances, not need to abide by these requirements. Under the FCRA, consumers have two methods for disputing inaccuracies in their consumer reports. The first is disputing the information with a consumer reporting agency (CRA). The second is to dispute it directly with a furnisher. This amicus brief responds to a case that centers upon a dispute filed directly with a furnisher. In this case, the consumer requested that a furnisher of credit information remove an account marked as delinquent from their consumer report. The consumer informed the furnisher that they were the victim of identity theft and had not opened the account. However, the furnisher rejected the claim, stating that the consumer failed to provide sufficient proof of identity theft and referred the account to a debt collector. The consumer later performed an indirect dispute by filing it through a CRA, which sent the dispute to a debt collector. The consumer later filed a complaint with a federal court alleging a violation of the FCRA. However, the lower court sided with the furnisher, finding that furnishers need only investigate "bona fide" disputes filed through a CRA. Otherwise, furnishers may decline to investigate a dispute it finds to be frivolous. In its amicus brief, however, the FTC and CFPB disagree with the lower court's ruling. They argue that nothing in the FCRA indicates that furnishers may choose not to investigate indirect disputes that it judges to be "frivolous." Instead, the agencies claim that the FCRA's protections already protect furnishers from frivolous disputes by requiring CRAs to make such a determination before forwarding them to a furnisher. Further, the agencies argue that this decision would undercut the right to dispute inaccurate information, which is key protection of the FCRA. The Third Circuit's final decision could significantly impact consumers' ability to file disputes and the furnishers' ability to decline to investigate disputes. Regardless of how the court rules, it will majorly impact consumer reporting. Keep your business up to date on new laws and regulations with Pre-employ’s free news resources. Contact a sales rep today. Resources

Tag: frivolous disputes

FTC and CFPB File Amicus Brief Regarding Furnisher’s Ability to Decline “Frivolous” Disputes

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