THE BEST DEFENSE IS A GOOD OFFENSE!
THE BEST DEFENSE IS A GOOD OFFENSE!
Are you prepared to defend your “reasonable procedures” as a “Furnisher” of credit report information? There has been a recent rash of court cases involving “furnishers” of credit report information:
- The New York Attorney General settled with the 3 major credit reporting agencies – Equifax, Experian, and TransUnion. The settlement requires national changes to improve the credit reporting and dispute resolution processes. No financial penalty was assessed but significant sums will need spent to enhance systems. (March 2015: http://www.nytimes.com/2015/03/10/business/big-credit-reporting-agencies-to-overhaul-error-fixing-process.html?_r=0 )
- The Federal Trade Commission announced a settlement with an auto dealer group where they failed to have written policies and procedures regarding the accuracy of reported information (September 2015: https://www.ftc.gov/news-events/press-releases/2015/09/texas-auto-dealer-will-pay-more-82000-settle-ftc-charges-it ). The dealer was ordered to pay $82,777 in civil penalties and the matter was referred to the Department of Justice.
- Ballard Spahr reported that there have been approximately 50 cases filed in Nevada against furnishers of information and credit reporting agencies (October 9, 2015: http://www.ballardspahr.com/alertspublications/legalalerts/2015-10-09-flurry-of-fcra-complaints-recently-filed-in-nevada-courts.aspx ) In their words: “This new wave of litigation in Nevada underscores the fact that furnishers of credit information must be vigilant about whether their systems are accurately reflecting debts discharged in a bankruptcy.”
Section 1022.42 of Regulation V for the Fair Credit Reporting Act (FCRA) requires that each furnisher must establish and implement “reasonable written policies and procedures” regarding the accuracy and integrity of information furnished to a consumer reporting agency, considering the guidelines in FCRA’s Appendix E { https://www.bankersonline.com/regulations/12-1022-appe } Have you done so?
Are you familiar with data furnisher requirements?
CDIA (Consumer Data Industry Association), which provides e-OSCAR software, has a course entitled “FCRA Certificate Program for Data Furnishers” to help understand FCRA/FACTA compliance requirements. http://www.cdiaonline.org/About/content.cfm?ItemNumber=10921&pnItemNumber=10923
Most institutions report to the 3 major bureaus using the software of their core system provider. Is it compliant with Metro2 reporting requirements?
Credit Reporting Resource Guide: https://www.cdiaonline.org/Store/ProductDetail.cfm?ItemNumber=6818
Metro 2 e-Learning System: http://www.cdiaonline.org/About/content.cfm?PreviewContentItem=69567&pnItemNumber=506&snItemNumber=11125
Finally, are you reviewing the error reports generated from your core system processor and by your designated consumer reporting agency (Equifax, Experian, or TransUnion) for anomalies?
In football jargon, “The best defense is a good offense!” For additional assistance, please contact one of our compliance team professionals at www.fosaudit.com or email the author Evelyn I. Dehmey at edehmey@fosaudit.com.
Evelyn I. Dehmey | THE BEST DEFENSE IS A GOOD OFFENSE!