Obligations of Credit Bureaus with respect to inaccurate/incorrect information

Discussion in 'Credit Talk' started by ColSandurz, Aug 26, 2014.

  1. ColSandurz

    ColSandurz Member

    I'm just wondering what obligation (legally speaking) the credit bureaus have in removing incorrect/inaccurate information - specifically when the information is incorrect or inaccurate, and yet after disputing this with the credit bureaus they still keep it on the credit reports (either because they stated they received confirmation from the creditor it was accurate or for some other reason).

    And is there any recourse aside from a lawsuit? Or is a lawsuit against the credit bureaus even allowed when they won't remove incorrect/inaccurate information, or do you have to sue (or otherwise contest) the creditor themselves that is reporting this inaccurate/incorrect information?

    Thanks.
     
  2. jam237

    jam237 Well-Known Member

    They are required to investigate and remove or correct any inaccurate or incorrect information.

    Unfortunately, however, they will typically do one dispute, then try to classify other disputes as frivolous.

    You can escalate the letters with more and more legalese to get over that initial frivolous determination.

    Each time the CRA verifies inaccurate information, they're putting $1,000 in your bank account, when you sue them... (and most times, unfortunately, you will have to sue them, they don't want to remove inaccurate information otherwise.)

    I would sue both. The reason is, the CRA actually is the one who has the legal obligation under the FCRA to perform the investigation. They shirk that responsibility off to the original data furnisher.

    You will want to read Cushman v. TransUnion and Johnson v. MBNA for a better understanding (and hopefully you'll glean the quotes to make your escalated series of letters work to get reinvestigations. (Hint: Save Johnson v. MBNA for last. :))
     
  3. ColSandurz

    ColSandurz Member

    Jam237 - thanks for the info! I'm not sure what you meant in your last paragraph though??
     
  4. jam237

    jam237 Well-Known Member

    Basically, 99% of the time, the CRAs will only dispute once, if you need something reviewed a second, third, fourth, fifth or more... You'll need to escalate the letters.

    Each one will need a steady escalation of the legal threat, and knowledge that they are the ones who are responsible when the DATA FURNISHER screws up.

    Cushman v. TransUnion is the first barb, it challenges the cursory review in the following way. A CA told Cushman that TU was reporting multiple credit cards which were fraudulently issued in her name, on her credit report. TU sent the DFs a dispute, and the DFs, having enough data to get it on her credit report in the first place, were able to answer the dispute, despite the fraudulent nature of the account, and that was the basis of the dispute.

    "There is no evidence that TUC took the necessary steps to obtain access to pertinent documents from the credit grantors that would enable TUC to perform a handwriting comparison. TUC did allow Cushman the opportunity to complete a form requesting that a special handling statement be placed on her report, and that form required her signature. However, a TUC employee testified that the form would not have been used for a handwriting comparison had Cushman completed it. TUC advises consumers in Cushman's position to communicate with the credit grantors and complete signature verifications and affidavits of fraud with the credit grantors. "

    TU has the legal responsibility to ensure that all data is 100% complete, accurate and verifiable; they can't just put it on the DF, and even if she had requested special handling, they wouldn't have taken steps to determine whether or not the account was fraudulent.

    (BTW: This quote really isn't one of the ones that I use in my letters.)

    Cushman uses as reference Henson v. CSC Credit Servs; "A credit reporting agency that has been notified of potentially inaccurate information in a consumer's credit report is in a very different position than one who has no such notice. . . . [A] credit reporting agency may initially rely on public court documents, because to require otherwise would be burdensome and inefficient. However, such exclusive reliance may not be justified once the credit reporting agency receives notice that the consumer disputes information contained in his credit report. When a credit reporting agency receives such notice, it can target its resources in a more efficient manner and conduct a more thorough investigation."

    IF you notify the CRA that data is incorrect, they can perform a more thorough investigation, because they should know what information that they could ask for to more expediently remedy the dispute.

    The court next uses Stevenson v TRW for its next point, which focuses on their subscriber reliability.

    "In a reinvestigation of the accuracy of credit reports [pursuant to § 1681i(a)], a credit bureau must bear some responsibility for evaluating the accuracy of information obtained from subscribers."

    This is why you want to look at the complete litigative history of the statutes, and find pieces of caselaw which support your position that your account needs to be reinvestigated as often as it takes for the inaccuracies to be found. Should they not be willing to do that, they have the alternative of paying you up to $1,000.00 per inaccurately completed investigation, and deleting the information in the end anyhow. :)
     
  5. NumbSkull

    NumbSkull Well-Known Member

    Oh Jam, always so helpful. Thank you!
     
  6. mrmatt

    mrmatt Well-Known Member

    Jam this is good stuff. I have been searching like crazy for case law or anything that I could add to my nasty letters. After reading this, all I can say is WOW!
     
  7. jam237

    jam237 Well-Known Member

    Everyone can thank a lawyer in Philadelphia for my legal caselaw knowledge... They filed a suit that they never intended to follow through on, at a time that I had nothing better to do than spend 18+ hours a day researching caselaw on the FDCPA and FCRA... :)

    You know, maybe I should have a lot of people send their firm "Thank You" letters after they're done working with me... :)
     

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