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Consumer Protection Bureau Cracks Down on Credit Disputes

credit-report-errorsUnfortunately, consumers know the frustration surrounding credit disputes. Even when you have proof of an error, getting that error corrected can be a hit or miss. The likelihood of an error being corrected on the first attempt is sometimes slim to none. But help may be on the way.

On September 4, 2013, the Consumer Financial Protection Bureau (CFPB) issued a bulletin to companies that supply information to credit reporting agencies. Those companies, known as “furnishers of information” are legally required to review all supporting documentation when a consumer submits a complaint to the credit bureaus.

However, due to the electronic complaint filing systems known as e-Oscar, the credit bureaus previously neglected to submit consumers’ proof or supporting documents to the credit bureaus.

The e-Oscar complaint filing system simply reduced any credit dispute sent by a consumer into a 2-digit number and forwarded the 2-digit complaint to the furnisher of information to verify as accurate or inaccurate. The “e-OSCAR” system did not provide a means for credit reporting companies to forward to furnishers any documents submitted by consumers.

An upgrade to the system has improved dispute process. The CFPB notified furnishers of information that they had a duty to review supporting documents submitted through the updated e-Oscar system.


Richard Cordray, director of the CFPB said “Credit reports play a critical role in the lives of consumers. Given the importance of these reports, consumers need to know that their documents are being reviewed when they dispute what they believe is a mistake on a report. Today’s bulletin helps ensure that the right people will be doing just that.”

Furnisher of information can be banks, lenders, credit card companies, collection agencies, U.S. Department of Education; basically anyone who provides information about your credit history to the major credit bureaus or any other consumer reporting agency.

Hopefully, the credit bureaus will now be in compliance with the Fair Credit Reporting Act (FCRA) which requires a consumer reporting agency to notify a furnisher when a consumer disputes the accuracy or completeness of an item of information. The credit bureaus should have all along been providing the furnisher of information “all relevant information” regarding the dispute that was received from the consumer.

The furnisher of information must “conduct an investigation” and review “all relevant information” provided by the credit bureau and respond appropriately based on an investigation.

The practice of simply verifying a 2-digit code as accurate or inaccurate should have never been acceptable. But, there has never been an oversight agency such as the CFPB that would actually force the credit bureaus to comply with the Fair Credit Reporting Act. The FTC has always fallen short when it came to complaints about the credit bureaus.

Consumers should make complaints about the credit bureaus directly to the CFPB. If the CFPB determines that a furnisher or credit bureau has violated the Fair Credit Reporting Act, it will take appropriate action to address the violations, correct the violations and possibly provide restitution consumers who may have been harmed.

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