FCRA and FACTA to request
deletion of an account from a CRA
You may have noticed
if you are correcting your credit yourself that often you will receive
letters back from the credit bureaus (CRA) that they have completed
their investigation and the results are not favorable... Account
remains. This happens often and consumers get stuck in the credit
repair process at this stage and are unsure what to do next. How
do you argue it, how do you get them to change their results.
The key to victory is: FACTA-FCRA
611-312 Method
The credit bureaus are
obligated by law to contact the furnisher of information
when you request that they investigate an item. If that furnisher
of information replies back to the CRA (credit reporting agency)
that the account is to remain unchanged then the credit bureaus
will pass that information along to you. At that point in the dispute
process you need to question the CRA on the information they received
from the source and ask that they show you what was received to
prove the account is to remain. By doing this you are forcing the
credit bureaus to actually provide you with what they received as
valid proof - and if all they received was a reply from the source
stating "to remain" then the source did not do their job
in investigating the item as they should have. You can then put
pressure on the source to prove it or remove it. If they refuse,
they can be sued.
The law
that provides this protection
You can use both the FCRA section 611 (a) (7) and 623 plus the FACTA
to apply pressure. FACTA is a newer law passed to give consumers
more protection. Under FACTA §312 a furnisher of information
must do the following BUT you have to follow procedures as described
exactly in the FACTA or it will not work. That means no shortcuts
and it's not VOD (validation of debt).
See this
release from the FTC about Direct Disputes. Here is section
312.
SEC.
312. PROCEDURES TO ENHANCE THE ACCURACY AND INTEGRITY OF
INFORMATION FURNISHED TO CONSUMER REPORTING AGENCIES.
(a) Accuracy Guidelines and
Regulations.--Section 623 of the Fair
Credit Reporting Act (15 U.S.C. 1681s-2) is amended by adding at
the end
the following:
``(e) Accuracy Guidelines and Regulations Required.--
``(1) Guidelines.--The Federal banking agencies, the
National Credit Union Administration, and the Commission shall,
with respect to the entities that are subject to their
respective enforcement authority under section 621, and in
coordination as described in paragraph (2)--
``(A) establish and maintain guidelines for use by
each person that furnishes information to a consumer
reporting agency regarding the accuracy and integrity of
the information relating to consumers that such entities
furnish to consumer reporting agencies, and update such guidelines
as often as necessary; and
``(B) prescribe regulations requiring each person
that furnishes information to a consumer reporting
agency to establish reasonable policies and procedures
for implementing the guidelines established pursuant to
subparagraph (A).
``(2) Coordination.--Each agency required to prescribe
regulations under paragraph (1) shall consult and coordinate
with each other such agency so that, to the extent possible, the
regulations prescribed by each such entity are consistent and
comparable with the regulations prescribed by each other such
agency.
``(3) Criteria.--In developing the guidelines required by
paragraph (1)(A), the agencies described in paragraph (1)
shall--
``(A) identify patterns, practices, and specific
forms of activity that can compromise the accuracy and
integrity of information furnished to consumer reporting
agencies;
``(B) review the methods (including technological
means) used to furnish information relating to consumers
to consumer reporting agencies;
``(C) determine whether persons that furnish
information to consumer reporting agencies maintain and
enforce policies to assure the accuracy and integrity of
information furnished to consumer reporting agencies;
and
``(D) examine the policies and processes that
persons that furnish information to consumer reporting
agencies employ to conduct reinvestigations and correct
inaccurate information relating to consumers that has
been furnished to consumer reporting agencies.''.
(b) Duty of Furnishers To Provide
Accurate Information.--Section
623(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)(1))
is
amended--
(1) in subparagraph (A), by striking ``knows or consciously
avoids knowing that the information is inaccurate'' and
inserting ``knows or has reasonable cause to believe that the
information is inaccurate''; and
(2) by adding at the end the following:
``(D) Definition.--For purposes of subparagraph (A),
the term `reasonable cause to believe that the
information is inaccurate' means having specific
knowledge, other than solely allegations by the
consumer, that would cause a reasonable person to have
substantial doubts about the accuracy of the
information.''.
(c) Ability of Consumer To Dispute
Information Directly With
Furnisher.--Section 623(a) of the Fair Credit Reporting Act (15
U.S.C.
1681s-2(a)), as amended by this Act, is amended by adding at the
end the
following:
``(8) Ability of consumer to dispute information directly
with furnisher.--
``(A) In general.--
The <<NOTE: Regulations.>> Federal banking agencies,
the
National Credit Union Administration, and the Commission
shall jointly prescribe regulations that shall identify
the circumstances under which a furnisher shall be
required to reinvestigate a dispute concerning the
accuracy of information contained in a consumer report on the
consumer, based on a direct request of a consumer.
``(B) Considerations.--In prescribing regulations
under subparagraph (A), the agencies shall weigh--
``(i) the benefits to consumers with the costs
on furnishers and the credit reporting system;
``(ii) the impact on the overall accuracy and
integrity of consumer reports of any such
requirements;
``(iii) whether direct contact by the consumer
with the furnisher would likely result in the most
expeditious resolution of any such dispute; and
``(iv) the potential impact on the credit
reporting process if credit repair organizations,
as defined in section 403(3), including entities
that would be a credit repair organization, but
for section 403(3)(B)(i), are able to circumvent
the prohibition in subparagraph (G).
``(C) Applicability.--Subparagraphs (D) through (G)
shall apply in any circumstance identified under the
regulations promulgated under subparagraph (A).
``(D) Submitting a notice of dispute.--A consumer
who seeks to dispute the accuracy of information shall
provide a dispute notice directly to such person at the
address specified by the person for such notices that--
``(i) identifies the specific information that
is being disputed;
``(ii) explains the basis for the dispute; and
``(iii) includes all supporting documentation
required by the furnisher to substantiate the
basis of the dispute.
``(E) Duty of person after receiving notice of
dispute.--After receiving a notice of dispute from a
consumer pursuant to subparagraph (D), the person that
provided the information in dispute to a consumer
reporting agency shall--
``(i) conduct an investigation with respect to
the disputed information;
``(ii) review all relevant information
provided by the consumer with the notice;
``(iii) complete such person's investigation
of the dispute and report the results of the
investigation to the consumer before the
expiration of the period under section 611(a)(1)
within which a consumer reporting agency would be
required to complete its action if the consumer
had elected to dispute the information under that
section; and
``(iv) if the investigation finds that the
information reported was inaccurate, promptly
notify each consumer reporting agency to which the
person furnished the inaccurate information of
that determination and provide to the agency any
correction to that information that is necessary
to make the information provided by the person
accurate.
``(F) Frivolous or irrelevant dispute.--
``(i) In general.--This paragraph shall not
apply if the person receiving a notice of a
dispute from a consumer reasonably determines that the dispute is
frivolous or irrelevant, including--
``(I) by reason of the failure of a
consumer to provide sufficient
information to investigate the disputed
information; or
``(II) the submission by a consumer
of a dispute that is substantially the
same as a dispute previously submitted
by or for the consumer, either directly
to the person or through a consumer
reporting agency under subsection (b),
with respect to which the person has
already performed the person's duties
under this paragraph or subsection (b),
as applicable.
``(ii) Notice <<NOTE: Deadline.>> of
determination.--Upon making any determination
under clause (i) that a dispute is frivolous or
irrelevant, the person shall notify the consumer
of such determination not later than 5 business
days after making such determination, by mail or,
if authorized by the consumer for that purpose, by
any other means available to the person.
``(iii) Contents of notice.--A notice under
clause (ii) shall include--
``(I) the reasons for the
determination under clause (i); and
``(II) identification of any
information required to investigate the
disputed information, which may consist
of a standardized form describing the
general nature of such information.
``(G) Exclusion of credit repair organizations.--
This paragraph shall not apply if the notice of the
dispute is submitted by, is prepared on behalf of the
consumer by, or is submitted on a form supplied to the
consumer by, a credit repair organization, as defined in
section 403(3), or an entity that would be a credit
repair organization, but for section 403(3)(B)(i).''.
(d) Furnisher Liability Exception.--Section
623(a)(5) of the Fair
Credit Reporting Act (15 U.S.C. 1681s-2(a)(5)) is amended--
(1) by striking ``A person'' and inserting the following:
``(A) In general.--A person'';
(2) by inserting ``date of delinquency on the account, which
shall be the'' before ``month'';
(3) by inserting ``on the account'' before ``that
immediately preceded''; and
(4) by adding at the end the following:
``(B) Rule of construction.--For purposes of this
paragraph only, and provided that the consumer does not
dispute the information, a person that furnishes
information on a delinquent account that is placed for
collection, charged for profit or loss, or subjected to
any similar action, complies with this paragraph, if--
``(i) the person reports the same date of
delinquency as that provided by the creditor to
which the account was owed at the time at which
the commencement of the delinquency occurred, if
the creditor previously reported that date of
delinquency to a consumer reporting agency;
``(ii) the creditor did not
previously report
the date of delinquency to a consumer reporting
agency, and the person establishes and follows
reasonable procedures to obtain the date of
delinquency from the creditor or another reliable
source and reports that date to a consumer
reporting agency as the date of delinquency; or
``(iii) the creditor did not previously report
the date of delinquency to a consumer reporting
agency and the date of delinquency cannot be
reasonably obtained as provided in clause (ii),
the person establishes and follows reasonable
procedures to ensure the date reported as the date
of delinquency precedes the date on which the
account is placed for collection, charged to
profit or loss, or subjected to any similar
action, and reports such date to the credit
reporting agency.''.
(e) Liability and Enforcement.--
(1) Civil liability.--Section 623 of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2) is amended by striking
subsections (c) and (d) and inserting the following:
``(c) Limitation on Liability.--Except
as provided in section
621(c)(1)(B), sections 616 and 617 do not apply to any violation
of--
``(1) subsection (a) of this section, including any
regulations issued thereunder;
``(2) subsection (e) of this section, except that nothing in
this paragraph shall limit, expand, or otherwise affect
liability under section 616 or 617, as applicable, for
violations of subsection (b) of this section; or
``(3) subsection (e) of section 615.
``(d) Limitation on Enforcement.--The
provisions of law described in
paragraphs (1) through (3) of subsection (c) (other than with respect
to
the exception described in paragraph (2) of subsection (c)) shall
be
enforced exclusively as provided under section 621 by the Federal
agencies and officials and the State officials identified in section
621.''.
(2) State actions.--Section 621(c) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(c)) is amended--
(A) in paragraph (1)(B)(ii), by striking ``of
section 623(a)'' and inserting ``described in any of
paragraphs (1) through (3) of section 623(c)''; and
(B) in paragraph (5)--
(i) in each of subparagraphs (A) and (B), by
striking ``of section 623(a)(1)'' each place that
term appears and inserting ``described in any of
paragraphs (1) through (3) of section 623(c)'';
and
(ii) by amending the paragraph heading to read
as follows:
``(5) Limitations on state actions for certain violations.--
''.
(f) Rule of Construction.--Nothing
<<NOTE: 15 USC 1681n note.>> in
this section, the amendments made by this section, or any other
provision of this Act shall be construed to affect any liability
under
section 616 or 617 of the Fair Credit Reporting Act (15 U.S.C. 1681n,
1681o) that existed on the day before the date of enactment of this
Act.
