Note that in this case, the CRA, which prepared tri-merged reports from the big 3 for use by a lender, augmented with additional credit information to substantiate making the loan. They didn't catch false credit information submitted by the employees of the lender itself. http://www.ftc.gov/opa/2006/01/farwestcredit.htm "For Release: January 17, 2006 Credit Reporting Agency Settles FTC Charges Company Did Not Follow Reasonable Procedures To Assure Credit Report Accuracy Consumer reporting agency Far West Credit, Inc. will pay $120,000 to settle Federal Trade Commission charges that it did not follow reasonable procedures to assure the accuracy of the information in the consumer reports it sold to mortgage companies, in violation of federal law. Assistance in this matter was provided to the FTC by the Office of Inspector General, Office of Investigations, United States Department of Housing and Urban Development. According to an FTC complaint, Far West creates consumer credit reports for use by the mortgage industry in evaluating consumers for loans. Far West buys credit reports from the major credit reporting agencies, Equifax, TransUnion and Experian, and merges the information about the consumers. If there is insufficient information about the consumerââ?¬â?¢s credit worthiness from the major credit reporting agencies, Far West will accept information from the consumer, or other interested parties, to show consumersââ?¬â?¢ credit status with businesses such as cable companies, utilities, ââ?¬Å?rent-to-ownââ?¬Â businesses and insurance companies ââ?¬â?? operations that do not report normally to the nationwide credit bureaus. They add this information to the reports they prepare on the consumer. The complaint alleges that Far West provided consumer reports to Keystone Mortgage and Investment Company, Inc., a home lender. Keystone had an interest in making the loans, and Keystoneââ?¬â?¢s employees provided documentation of borrowersââ?¬â?¢ credit accounts to Far West to be used in creating consumer reports for those borrowers. The credit information provided by Keystone employees was not adequately verified by Far West, the FTC charges. In fact, documentation provided by Keystone for many of the consumers was false. For example, in many cases Keystone documented accounts with utility and cable companies that did not even service the areas where the consumers lived, according to the complaint."
