Credit Blog


CFPB: Credit bureaus and creditors often seek to avoid the duty to reasonably investigate consumer disputes

Posted by Brett D. Sherman | Nov 15, 2022

On November 10, 2022, the Consumer Financial Protection Bureau (CFPB) issued "Consumer Financial Protection Circular 2022-07 - Reasonable Investigation of consumer reporting disputes."
Below are key excerpts from CFPB Circular 2022-07.  You can read the full document here.
  • [Congress enacted the Fair Credit Reporting Act (FCRA)] to prevent consumers from being unjustly damaged because of inaccurate or arbitrary information in a credit report.”
  • A central component of the protections against inaccurate information is the requirement to conduct a reasonable investigation of consumer disputes
  • when consumer reporting agencies and furnishers are properly notified of a dispute about information furnished in a consumer report, both consumer reporting agencies and furnishers must conduct a reasonable investigation of the dispute.  See, e.g., 15 U.S.C. 1681i(a)(1)(A) (Consumer reporting agency obligation to “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate”); 15 U.S.C. 1681s-2(b)(1) (furnisher obligation to “conduct an investigation with respect to the disputed information” for disputes provided by a consumer reporting agency); 12 CFR 1022.43(e)(1) (furnisher obligation to “conduct a reasonable investigation with respect to the disputed information” for disputes sent directly from a consumer); see also Johnson v. MBNA America Bank, NA, 357 F.3d 426, 431 (4th Cir. 2004) (holding that furnishers receiving indirect disputes from consumer reporting agencies must “conduct a reasonable investigation of their records to determine whether the disputed information can be verified.”).
  • [T]imely and responsive investigations of these identified inaccuracies is crucial to the FCRA's purpose of ensuring fair and accurate consumer reporting.
  • The CFPB is responsible for issuing rules and enforcing compliance with . . . the [reasonable investigations requirements in the] FCRA.   See, e.g., 12 U.S.C. 5481(12)(F), 5512(b), 5514(c), 5515(c), and also Subtitle E (12 U.S.C. 5561 – 5567); 15 U.S.C. 1681s(b)(1)(H), (e).
  • Consumer reporting agencies and furnishers cannot avoid the obligation to conduct a reasonable investigation of disputes by making consumers satisfy demands other than those specified by statute or regulation. The CFPB is aware that consumer reporting agencies and furnishers have sought to evade the obligation to investigate disputes by requiring consumers to submit particular items of information or documentation with a dispute before the entity will conduct its investigation of the dispute.
  • Enforcers may bring[ ] an action under the FCRA when furnishers and consumer reporting agencies require consumers to provide documentation or proof documents, other than as described in the statute or regulation, as a precondition to investigation. For disputes received directly from a consumer, a consumer reporting agency or furnisher must reasonably investigate the dispute unless they have reasonably determined that the dispute is frivolous or irrelevant.
  • [C]onsumer reporting agencies and furnishers must reasonably investigate disputes received directly from consumers that are not frivolous or irrelevant – and furnishers must reasonably investigate all indirect disputes received from consumer reporting agencies – even if such disputes do not include the entity's preferred format, preferred intake forms, or preferred documentation or forms.
  • Consumer reporting agencies must provide to the furnisher all relevant information regarding the dispute that it received from the consumer... The consumer reporting agency's failure to provide the furnisher with all relevant information limits the furnisher's ability to reasonably investigate the dispute.
  •  A furnisher must [as part of its responsibility to conduct a reasonable investigation pursuant to the FCRA] “review all relevant information” provided by the consumer reporting agency.
  • Consumer reporting agency compliance with the obligation to provide all relevant information [about a consumer dispute to the data furnisher/creditor] is crucial to the consumer's right to have their dispute reasonably investigated. 15 U.S.C. 1681s-2(b)(1)(B).

About the Author

Brett D. Sherman

In 2020, 2021, and  2022, Brett was selected by Thomson Reuters Super Lawyers as a "Top-Rated Consumer Law Attorney in New York, NY."

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