We are concern about this industry establishing more systems to create higher profits instead of providing quality service for the clients we serve. Remember we must do no harm to our clients and providing a high quality service is paramount. Sometimes this involves more detail for each client and not tactics. Credit bureaus are not stupid and aware of all of the different approaches to credit repair from hand written letters to noticing if a client is using a third party. Nevertheless, they respond to legal requests.
As a credit consultant, make sure you are preparing your clients for legal claims in your operations.
Sending a dispute letters to the original creditor and credit bureau without understanding how or which sections of the FCRA affects them is moot and unprofessional. It can be consider a frivolous dispute.
If an account does not belong to your client, send a notarized affidavit of Fraud to the original creditor instead of a dispute letter.
If you are intending to sue if an item is not corrected, you can send a letter to both creditor and credit bureau to establish a legal claim. Then if you sue because you have the facts on your side, could result in greater settlements or punitive damages.
You must understand your strategy first as a credit consultant. Asking a creditor to validate a debt is unprofessional and it has become clearer that this process does not work. Credit Bureaus and Data Furnishers respond to legal letters with the proper provision that regulates them; nothing else matters to them.
Here is what CCA is noticing that works: Send a letter to the credit bureau first and wait for their response. Step two is to send a letter to the creditor notifying that you have disputed the item with the credit bureau indicating their response and requesting accurate reporting. Next send another letter at the same time, along with copies of all of your response to the credit bureau for the second revisit of the issue. You are establishing legal claims for your client in a professional matter.
We all know that some items come off with a simple dispute letter but not in all cases. Just sending letters without detail claims is not helping your client and will always indicate third party disputing especially when using some of the software programs available. You may have to make adjustments to the approach when using Credit Repair Software to prevent frivolous disputes. You are not just in the business to make money from less inform clients. You should want to provide top quality service for the overall credit health of your client. It is all about the credit score and not how many items one can get off a credit report.
We have become aware of consumers being tagged as sending frivolous disputes letters and 100% of them were with companies that use credit repair software that simply kicks out chain dispute letters. They are now in this legal loophole to resolve this matter.
The software is NOT the problem. You have to do your job as a consultant to make sure that you have established a strategy for each client. Make sure you keep copies of the printout and credit bureau responses in order to respond to the CB in the proper fashion just in case the issue will escalate to courts. The software is a tool to manage your organization and does not know your client’s situation. You must provide this information and the missing link to success or failure of helping your client.
Obligations of Furnishers Under the FCRA
The federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681-1681y, imposes responsibilities on all persons who furnish information to consumer reporting agencies (CRAs). These responsibilities are found in Section 623 of the FCRA, 15 U.S.C. 1681s-2.
State law may impose additional requirements on furnishers. All furnishers of information to CRAs should become familiar with the applicable laws and may want to consult with their counsel to ensure that they are in compliance.
Section 623 imposes the following duties upon furnishers:
Accuracy Guidelines
The banking and credit union regulators and the FTC will promulgate guidelines and regulations dealing with the accuracy of information provided to CRAs by furnishers. Section 623(e).
General Prohibition on Reporting Inaccurate Information
The FCRA prohibits information furnishers from providing information to a CRA that they know or have reasonable cause to believe is inaccurate. However, the furnisher is not subject to this general prohibition if it clearly and conspicuously specifies an address to which consumers may write to notify the furnisher that certain information is inaccurate. Section 623(a)(1)(A) and (a)(1)(C).
Duty to Correct and Update Information
If at any time a person who regularly and in the ordinary course of business furnishes information to one or more CRAs determines that the information provided is not complete or accurate, the furnisher must provide complete and accurate information to the CRA. In addition the furnisher must notify all CRAs that received the information of any corrections, and must thereafter report only the complete and accurate information. Section 623(a)(2).
Duties After Notice of Dispute from Consumer
If a consumer notifies a furnisher, at an address specified by the furnisher for such notices, that specific information is inaccurate, and the information is, in fact, inaccurate, the furnisher must thereafter report the correct information to CRAs. Section 623(a)(1)(B).
If a consumer notifies a furnisher that the consumer disputes the completeness or accuracy of any information reported by the furnisher, the furnisher may not subsequently report that information to a CRA without providing notice of the dispute. Section 623(a)(3).
The federal banking and credit union regulators and the FTC will issue regulations that will identify when an information furnisher must investigate a dispute made directly to the furnisher by a consumer. Once these regulations are issued, furnishers must comply with them and complete an investigation within 30 days (or 45 days, if the consumer later provides relevant additional information) unless the dispute is frivolous or irrelevant or comes from a “credit repair organization.” . Section 623(a)(8).
Duties After Notice of Dispute from Consumer Reporting Agency
If a CRA notifies a furnisher that a consumer disputes the completeness or accuracy of information provided by the furnisher, the furnisher has a duty to follow certain procedures. The furnisher must:
• Conduct an investigation and review all relevant information provided by the CRA, including information given to the CRA by the consumer. Section 623(b)(1)(A) and (b)(1)(B).
• Report the results to the CRA that referred the dispute, and, if the investigation establishes that the information was, in fact, incomplete or inaccurate, report the results to all CRAs to which the furnisher provided the information that compile and maintain files on a nationwide basis. Section 623(b)(1)(C) and (b)(1)(D).
• Complete the above steps within 30 days from the date the CRA receives the dispute (or 45 days, if the consumer later provides relevant additional information to the CRA). Section 623(b)(2).
• Promptly modify or delete the information, or block its reporting. Section 623(b)(1)(E).
Duty to Report Dates of Delinquencies:
If a furnisher reports information concerning a delinquent account placed for collection, charged to profit or loss, or subject to any similar action, the furnisher must, within 90 days after reporting the information, provide the CRA with the month and the year of the commencement of the delinquency that immediately preceded the action, so that the agency will know how long to keep the information in the consumer’s file. Section 623(a)(5)
Any person, such as a debt collector, that has acquired or is responsible for collecting delinquent accounts and that reports information to CRAs may comply with the requirements of Section 623(a)(5) (until there is a consumer dispute) by reporting the same delinquency date previously reported by the creditor. If the creditor did not report this date, they may comply with the FCRA by establishing reasonable procedures to obtain and report delinquency dates, or, if a delinquency date cannot be reasonably obtained, by following reasonable procedures to ensure that the date reported precedes the date when the account was placed for collection, charged to profit or loss, or subjected to any similar action. Section 623(a)(5).
Duties of Financial Institutions When Reporting Negative Information
Financial institutions that furnish information to “nationwide” consumer reporting agencies, as defined in Section 603(p), must notify consumers in writing if they may furnish or have furnished negative information to a CRA. Section 623(a)(7). The Federal Reserve Board has prescribed a model disclosure, 12 CFR Part 222, App.B.