The FTC and bank regulators recently published Final Rules, required by the Fair and Accurate Credit Transactions Act amendments to the Fair Credit Reporting Act. The Rules seek to enhance the accuracy and integrity of information in consumer reports, and to identify circumstances under which entities that furnish the information (Furnishers) to consumer reporting agencies (CRAs), will be required to investigate disputes about the accuracy of information at the consumer’s direct request. The Final Rules take effect on July 1, 2010. Some noteworthy new features are as follows:
Accuracy and Integrity Regulations. Furnishers must establish, implement, and regularly update reasonable written policies and procedures regarding the accuracy and integrity of the information they report to CRAs that are appropriate to and reflect their business activities, the nature and frequency of information they report, and the technology they use for that purpose. “Accuracy” is defined to mean that information provided must correctly reflect the terms of and liability for the account, the consumer’s performance with respect to the account, and the consumer’s identity. “Integrity” is defined to mean that information provided must be substantiated by the Furnisher’s records, provided in a form and manner designed to minimize the likelihood that it will be reflected incorrectly in a consumer report, and include information whose absence would mislead users in evaluating creditworthiness.
Direct Dispute Rule. Furnishers also will be required to investigate disputes received directly from consumers about the accuracy of reported information relating to the liability on their accounts, account terms, balances, potential identify theft, and “any other information contained in a consumer report regarding the consumer’s relationship with the furnisher which “bears on the consumer’s creditworthiness, credit standing, [and] character.” The Furnisher must report the results of its investigation to the consumer within 30 days of receiving the consumer’s written dispute notice.