The CFPB recently issued a statement regarding credit reporting companies (i.e., credit reporting agencies or “CRAs”) and furnishers and their legal obligations under FCRA. Specifically, the CFPB stated that CRAs and furnishers are required to ensure that the information reported on consumers is both “legally” and “factually” accurate.
In two active cases, one against a CRA and one against a furnisher, the CFPB filed amicus briefs in support of the Bureau’s position that CRAs and furnishers must ensure reported consumer information does not contain “legal” or “factual” inaccuracies. In the case against the CRA, a consumer brought an action against the CRA for violating FCRA by allegedly failing to have reasonable procedures to assure the information on the consumer’s report was accurate. The consumer claims that the CRA reported on her credit report that she owed a certain amount on a car lease that she actually did not owe under the terms of her lease. The CRA argued that it did not err because the error was “legal” rather than “factual” in nature. The CRA also argued that the information was not inaccurate because it was provided by the company that financed the lease. In the amicus brief, which was filed jointly by the CFPB and FTC, the agencies stated that regardless of whether the error is “legal” or “factual,” the CRA needed to follow reasonable procedures to prevent inaccurate statements and noted that FCRA does not exempt “legal” inaccuracies.
In the other case, a consumer, who was a victim of identity fraud and had many accounts opened in her name, brought an action against a credit furnisher for reporting inaccurate information to CRAs even after the consumer disputed the information. The consumer alleges that after she disputed the information with the furnisher, the furnisher kept reporting the account at question to CRAs. The furnisher argued that the error was “legal” rather than “factual,” which should excuse the furnisher from liability. In its amicus brief, the CFPB noted that the furnisher had a duty under FCRA to reasonably investigate the disputed information, regardless of whether the dispute could be characterized as a “legal” or “factual” issue.