-> Perpetual Disputes

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§ 623 (A) (3). Duty to provide notice of dispute.:


Devils Advocate Scenario:

Maryâ??s Dilemma:

Mary has an account with ABC co., disputes it's accuracy to ABC, and waits to see if ABC reports that the previously furnished information becomes listed as "disputed by consumer". It never happens. Mary comes to believe that she has a cause of action to sue the Data Furnisher (DF) for failure to list the account as disputed to the CRA. A violation of § 623 (A) (3)

• During a reporting a DF is required to report the "in dispute" notation. But they are NOT required to drop everything they're doing and report "disputed" to an already reported TL.

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  § 623. Responsibilities of furnishers of information to consumer
  reporting agencies [15 U.S.C. § 1681s-2]

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  (A)(3) Duty to provide notice of dispute. If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

A careful examination of the [underlined portion] of the above statute contemplates the occurrence of two different things.

They are, (and in their order);

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  [*]That the DF furnishes [reports] information to a CRA
  [*] The DF includes with it's report the fact that the information is under dispute.

The order of these two components are critical. The statute contemplates that the first thing that happens, (or is considered) is that the information is reported. The second [almost as an afterthought] is that while reporting same the DF may not do so without including the "in dispute notation."


But what happens when the information had already been reported? For example, PRIOR to the OC's receipt of Mary's dispute.

We as consumers do not have a private right of action under (A). ONLY under (B). Section "D" specifically exempts your adversary from CIVIL liability for violating anything under (A). It reserves enforcement exclusively to the feds, or the state.

So subsections "C" & "D" are also pertinent to the conversation about the consumers right of private action.

You'll notice that the "Duty to provide notice of dispute" is contained in Section (A).

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  § 623.
  (A) Duty of furnishers of information to provide accurate information.
  (3) Duty to provide notice of dispute.
  
  (B) Duties of furnishers of information upon notice of dispute.
  
  (C) Limitation on liability. Sections 616 and 617 [§§ 1681n and 1681o] do not apply to any failure to comply with subsection (a), except as provided in section 621(c)(1)(B) [§ 1681s].
  
  (D) Limitation on enforcement. Subsection (a) shall be enforced exclusively under section 621 [§ 1681s] by the Federal agencies and officials and the State officials identified in that section.

Continued:
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Continued:

Enter, Nelson v. Chase

Nelson attempted to sue the OC for a violation of the FCRA.

Chase argued that since [according to "D"] only the gov't has authority to pursue violations of "A", it follows naturally that this civil exemption also applies to violations of "B". Therefore, no [consumer actionable] liability accrues to the DF for violations of either "A" or "B".

Chase attempted to escape civil liability by absconding with the "C" & "D", Limitations on liability, and applying it [the limitation], inappropriately to "B": as well.


For help the court turns to the FTC

Amicus Brief in support of Nelson, in Nelson V. Chase.

Primary Focus Of The Brief:

The FTC disagreed with Chase' position and filed their brief to explain why. I encourage everyone to read it.

Well, thank God for Nelson, and the FTC. Or we may not even today have a private right of action without them.

The bottom line of all this is; although you do have a private right of action for violations of "B", you don't for violations of "A", which btw â?? contains the provision we are presently discussing.

So 3Dayâ??s question seems to be consistent with Maryâ??s hypothetical. Conspicuously absent is whether or not 3Day lodged his dispute directly to the CRA.

Donâ??t worry 3Day. A very common mistake.


FTC V. PCM:

• B. failing to properly investigate consumer disputes, as required by Section 623(b) of the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b), when consumer reporting agencies refer disputes to the defendant pursuant to Section 611(a)(2), 15 U.S.C. § 1681i(a)(2).
  
  In order to comply with Section 623(b) when a consumer disputes the accuracy of information reported by the defendant to a consumer reporting agency, defendant shall either verify the information with the original account records within the time period set forth in the Fair Credit Reporting Act or take all necessary steps to delete the information from the files of all consumer reporting agencies to which the information was reported. In any situation where the defendant either knows that no original records exist, or is informed by the original creditor that no records exist, the defendant shall, within five business days after receiving the consumer dispute, notify all consumer reporting agencies to which the information has been provided that the information is to be deleted from the file of the consumer who has disputed the account;

Even in FTC v. PCM, the FTC clearly states that a dispute needs to be properly handled once the DF is notified of a dispute BY THE CRA.



All is not lost however.

There's a lot of stuff that goes on behind the scenes which constitutes "reporting".

Most creditors do report automatically, on magnetic tape, each month. This IS reporting, and if it happens without the inclusion of the in dispute notation, now you may have an argument.

Also - you CAN force a communication to occur. You do so by disputing with the CRA, which in turn is required to notify the DF. Their responsibilities to investigate are then triggered and the results are to be "reported" back to the CRA. If THIS communication is absent the in dispute notation, now you may have an argument.

DON'T assume you have an argument, like Mary did. You can't just dispute directly to the DF and expect them to "notify" the CRA's of the dispute, and then develop a suit based on this one component.

Additionally, watch carefully your "Current Status", or "Date Reported". These are the dates of the last time the DF reported to the CRA. The status itself is not the issue, but the date of the reporting.

If the Date Reported Date is AFTER your dispute but is absent the in dispute notation you, again, may have an argument.

I've seen some who believe that simply disputing directly to the DF that a debt is disputed and waiting to see if it gets included on the CR makes a case.

My interpretation is that it does not.


Additionally - I would not depend exclusively on this one violation anyway, but rather include it in all the other violations you develop from your adversary. If one files on just this one charge, it's likely to be dismissed upon motion for lack of subject matter jurisdiction. [Failure to state a claim upon which releif can be granted].

Your argument then, is not that they failed to list your disputed item as "in dispute", (absent a post dispute routine reporting) pursuant to [15 U.S.C. § 1681s-2 (A)].

Your argument rather, is that they've failed miserably to properly investigate and correct the info pursuant to [15 U.S.C. § 1681s-2 (B)].

But until you dispute with the CRA, there's no argument - period!

• Once you do that the DF has 30 days to do one of two thing; either verify the accuracy with original records, or delete. End of story. Leaving an item in dispute indefinitely is NOT an option.

I hope this addresses your 2 questions 3Day.



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Yeah!

What Dixie said.



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