The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), establishes rules for credit reporting agencies (CRAs) directing how consumer information must be reported. CRAs include agencies like the major credit bureaus, tenant screening companies and check verification services. The information used in consumer credit reports is used by third parties in making determinations about a consumer’s eligibility for credit, insurance rates, employment and housing.[i] The Furnisher Rules for information collection and use in connection with the FCRA is codified in a section of the Code of Federal Regulations (CFR), titled, Part 660 – Duties of Furnishers of Information to Consumer Reporting Agencies.[ii] The Furnisher Rules require CRAs to establish and implement reasonable policies and procedures for consumers to make direct disputes of information, as well as policies to ensure the accuracy and integrity of furnished information.
About the National Consumer Assistance Plan
The three major credit reporting bureaus, Equifax, Experian and TransUnion are participants in the National Consumer Assistance Plan, which is designed to improve the collection of complete and accurate consumer information, as well as to make the process of information collection and management transparent to consumers. The plan includes provisions for updates to the mandatory reporting requirements and procedures for collecting consumer data.
The plan impacts the organizations who furnish data to the credit bureaus, namely collection agencies, debt buyers and as well, those who are reporters of authorized user data. Some of the new rules under the plan take effect on June 15, 2016, and others are effective September 15, 2017.[iii] The plan rules and changes were provided to data furnishers in March to help in transitioning to the new requirements to accomplish accuracy and transparency goals in the best interests of consumers.
Examples of new requirements on credit bureaus
Collection agencies and debt buyers are required to implement data reporting changes before the effective dates as follows:
- Report the name of the Original Creditor and Creditor Classification Code – 06/15/2016
- Do not report a debt that did not arise from a contract or agreement to pay – 06/15/2016
- Report a full file monthly – 06/15/2016
- Do not report Medical Debt collection accounts less than 180 days old – 09/15/2017
- Report a delete for accounts that are being paid or were paid in full through insurance – 09/15/2017
Additionally, all data furnishers must report using the newly established minimum reporting requirements for consumer personally identifiable information before September 15, 2017, and as well before that date, all reporters of authorized user data must report the full date of birth for new authorized users on all accounts.
The impact of the new rules on CRAs
Changes under the Plan rules should reduce the number of consumer complaints and lawsuits filed against CRAs. The new rules help direct the CRAs to be in compliance with the FCRA requirements. The more transparent process and accuracy measures can prevent the mistakes and credit reporting violations that cause harm to consumers, leading to litigation and FTC investigation and enforcement.
New rules and policy directives often draw critics and the National Consumer Assistance Plan is no exception. Critics of the plan suggest that the implementation of the rules by the CRAs may involve confusion and error in direction. The unintended consequences of new policies and rules often present challenges to organizations working to achieve compliance with rules. Some CRAs could refuse to comply with the rules or purposely make their own interpretations suiting their perceived best interests.
In the event you as a consumer, detect that a CRA such as a collection agency is violating the new rules and the FCRA, you may have a right to sue them and file a complaint with the FTC. The Zamparo Law Group is advocating for consumers whose information is not kept or recorded correctly as required by consumer laws.
As consumer laws change, the Zamparo Law Group publishes articles and resources to help consumers better understand the laws designed to protect them from harm. When the credit bureaus fail to follow the law, the Zamparo Law Group is there to help consumers fight for their rights and recover after harmful violations by the bureaus and other CRAs.
The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.
To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook, Twitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.
[ii] CFR, Duties of Furnishers of Information to Consumer Reporting Agencies, Title 16 → Chapter I → Subchapter F → Part 660
[iii] Furnisher Data Reporting and Process Requirement Changes, To All Data Furnishers March 2016.