Data furnishers must conduct a reasonable investigation of a consumer credit dispute after receiving the dispute from the credit reporting agency.  Regulation V details guidelines for furnisher compliance with the FCRA by requiring written procedures for dispute investigations so that the information that the data furnisher provides for a consumer credit report is accurate and has data integrity.  Furnishers typically receive notice of the dispute electronically on an Automated Consumer Data Verification Form (ACDV).  The credit reporting agency sending the ACDV to the data furnisher should properly identify the dispute and attach the consumer’s supporting documentation provided by the consumer.  Court’s interpreting the FCRA have held that a furnisher must conduct a reasonable investigation of the consumer’s dispute by reviewing all relevant information in the form of a detailed and systematic inquiry of the information in the furnishers records.

In order to conduct a reasonable reinvestigation, the data furnisher must establish and follow reasonable procedures.  See Regulation V of the Fair Credit Reporting Act at 12 C.F.R. §1022.42.  Under Regulation V, a data furnisher must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes information to a consumer reporting agency.  12 C.F.R, §1022.42(a).  In addition, the furnisher must periodically review and update its procedures as necessary to assure the ability to provide accurate credit information.  12 C.F.R.  §1022.42(c).  Appendix E to Regulation V provides a roadmap of the means to establish and implement specific procedures that result in proper credit report dispute investigations.

The specific procedures identified in Appendix E are an outline for the data furnisher to provide data information with the accuracy and integrity required by the Fair Credit Reporting Act.  Notably the furnisher should establish and implement appropriate internal controls through standard operating procedures including a verification of random samples of credit report information previously provided.  Furnishers should also provide adequate training to staff for compliance with the FCRA as well as provide effective oversight.  In addition, following any mergers or portfolio acquisitions, furnishers must prevent the re-aging of old information, duplicative reporting, or other errors that may affect credit report information accuracy.  Furnishers have specific duties and a grave responsibility to provide fair and accurate information regarding consumers. Only proper dispute investigation procedures in accordance with Appendix E will assure maximum possible accuracy as required by the FCRA.

Consumers believing that they have inaccurate information on their credit report should make a dispute with the credit reporting agency who reports the inaccurate information provided from a credit data furnisher in order to trigger the consumer’s rights under the FCRA.  The credit reporting agency also has a duty to conduct its own investigation including sending notice of the dispute and all relevant information to the data furnisher.  See 15 U.S.C. §1681i.  For information on how to write a good consumer dispute letter, please the previous post.