ACA Member FAQs

The answer depends on whether the consumer submits the dispute directly to the debt collector or the dispute is forwarded to the debt collector from a CRA. Both types of disputes are addressed below:

1. Direct Dispute
In the case of a dispute received directly from a consumer, furnishers must conduct a reasonable investigation of a direct dispute if the dispute relates to:

• The consumer’s liability for a credit account;
• The terms of a credit account;
• The consumer’s performance or conduct related to an account; or
• Any other information related to the consumer’s credit standing, character, or reputation.

The furnisher must complete its investigation within 30 days from the date the furnisher receives the dispute from the consumer and inform the consumer of the results. The reinvestigation period may be extended up to 15 additional days if the consumer submits additional information during the 30-day period that is relevant to the investigation. If the investigation results in a finding that information reported by the furnisher was inaccurate, the furnisher must promptly notify each CRA to which the furnisher reported the inaccurate information and provide to the CRA any corrections necessary to make the information accurate.

A furnisher is not required to conduct an investigation if the direct dispute relates to:

• The consumer’s identifying information, such as the consumer’s name, date of birth, Social Security number, telephone number(s), or address(es);
• The identity of past or present employers;
• Inquiries or requests for a consumer report;
• Information derived from public records, such as judgments, bankruptcies, liens, and other legal matters;
• Information related to fraud alerts or active-duty alerts;
• Information provided to a CRA by another furnisher; or
• If the dispute is frivolous or irrelevant.

For further information on investigating direct disputes, please see ACA SearchPoint document #1522 Direct Disputes from Consumers to Furnishers under the FCRA. 

2. Dispute Forwarded by CRA
In the case of a dispute forwarded by a CRA, the furnisher must:

• Conduct an investigation regarding the disputed item;
• Review all relevant supplementary documentation provided to the CRA by the consumer and the furnisher’s own information with respect to the dispute;
• Report the outcome of the investigation to the CRA;
• If the investigation reveals information that is inaccurate or incomplete, inform all CRAs which compile and maintain consumer information on a nationwide basis of the result of the investigation; and
• If an item is determined to be inaccurate, incomplete, or unverifiable, modify or delete the item in the consumer report or permanently block the reporting of that item.

The data furnisher must complete its investigation within 30 days from the date the dispute was received by the CRA. A data furnisher may receive an additional 15 days to complete the investigation if relevant information is received after the start of the investigation.

For further information on investigating disputes from CRAs, please see ACA SearchPoint document #1526 Data Furnisher Responsibilities Under the FCRA.

Yes, a furnisher is required to respond to the CRA or the information will likely be deleted from the consumer’s credit report. Furnishers cannot deem these types of disputes frivolous or irrelevant. Although a CRA may terminate a reinvestigation if the CRA reasonably determines the consumer’s dispute is frivolous or irrelevant, if a data furnisher receives a dispute from a CRA, the data furnisher cannot make the determination of the dispute’s status as frivolous or irrelevant. Instead, the data furnisher must conduct an investigation of a disputed item as outlined in the previous answer above if the data furnisher receives a notice of a dispute directly from a CRA.

Not necessarily. Unlike disputes forwarded by a CRA, the FCRA allows furnishers to determine that a dispute received directly from a consumer is “frivolous or irrelevant,” which includes disputes that are “substantially the same as a dispute previously submitted by or on behalf of the consumer, regardless of whether the dispute had been previously submitted directly or through a CRA, so long as the consumer has not provided additional supporting information regarding the dispute.” Based on this provision, a furnisher does not have to investigate a dispute that is substantially the same as a previous dispute sent by the consumer. Furnishers are required to notify consumers that the dispute has been deemed frivolous within five business days of making the determination; however, once a consumer has received that notification, subsequent disputes that are “substantially the same” as a previous dispute would not trigger a furnisher’s duty to conduct an investigation or respond to the consumer.

Upon receipt of a valid dispute, furnishers must conduct a “reasonable” investigation. The reasonableness of an investigation will likely depend on the circumstances of the case, including the information the CRA provided the furnisher about the nature of the dispute, information the furnisher has in its own files and the status of the furnisher (e.g., original creditor, third-party debt collector, asset buyer, “down-the-line” asset buyer). When conducting an investigation, it may be reasonable for the furnisher to contact the original creditor or other reliable sources of the disputed information to verify the accuracy or completeness of the item, as well as review the supporting documentation accompanying the notice of dispute. Simply verifying that basic account information matches the furnisher’s internal account records may not be sufficient. If the furnisher cannot locate the documentation necessary to investigate the dispute, it may be appropriate to report the dispute as unverifiable and process it accordingly.

The CFPB has addressed the issue of deleting information from a consumer’s credit file in response to a dispute rather than conducting an investigation of the dispute. In 2014 the CFPB issued Bulletin 2014-01, wherein the regulator stressed the need to conduct an investigation as required under the FCRA and its corresponding regulations (Regulation V), rather than deleting the information without investigating the dispute. 

In the Bulletin, the CFPB stated that “investigations of disputes are important because they provide a critical check on the accuracy of furnished items. Not only do they prompt a furnisher to reconsider information that a consumer has identified as incorrect, investigations can also help a furnisher identify problems with respect to the general accuracy of the information that it furnishes to CRAs. That is, when the furnisher conducts an investigation, it may learn of a systemic problem, thereby benefiting not only the consumer who raised the dispute, but also other similarly situated consumers who did not submit disputes. In addition, if a furnisher does not conduct investigations, consumers can be harmed because the furnisher may not carry out additional steps that the FCRA calls for with respect to a dispute. These include the obligation of a furnisher to provide notice of information found to be inaccurate to all consumer reporting agencies to which it reported.”

The CFPB further stated that “a consumer submits a dispute to a CRA regarding an account in a consumer report and the CRA provides the furnisher of that account with notice of that dispute, the furnisher should investigate the dispute, and, if appropriate, direct the CRA to correct or delete the disputed information. Similarly, if the consumer submits a direct dispute notice to the furnisher, the furnisher generally should conduct an investigation of the dispute and then, based on the results of the investigation, provide appropriate instructions to the CRA.”

The CFPB also stated in Bulletin 2014-01 that if it determines that a furnisher has engaged in any acts or practices that violate the FCRA or other Federal consumer financial laws and regulations, it will take appropriate supervisory and enforcement actions to address violations. To view the 2014 guidance bulletin please click here . For further information on the CFPB and disputes from CRAs, please see ACA SearchPoint documents #3057 Overview of the Consumer Financial Protection Bureau, #1526 Data Furnisher Responsibilities under the FCRA, and #1522 Direct Disputes from Consumers to Furnishers under the FCRA.

Often referred to as “credit bartering” this is an area of some ambiguity. The FCRA does not have a specific provision regarding deleting or continuing reporting an account that is paid in full. Thus, some people argue that once an account has been paid in full, it is within the data furnisher’s discretion to continue reporting the account as paid in full or to delete the information from the consumer report. Others argue that because the FCRA requires information to be accurate, it could be considered an inaccuracy to delete a paid account instead of marking it as paid. Additionally, removing accurate information about a debt also weakens the credit reporting system as a whole by failing to reflect the consumer’s credit history accurately.

It’s also important to know that the agreements between data furnishers and the respective CRAs may prohibit agencies from deleting paid accounts and instead the CRAs require paid accounts to be marked as paid in full. Thus, deleting accurate information may violate the agreement between a furnisher and the CRA to which it reports, which could potentially jeopardize the furnisher’s ability to report debts if the CRA decides to terminate the agreement.

For further information on the CFPB and disputes from CRAs, please see ACA SearchPoint documents #3057 Overview of the Consumer Financial Protection Bureau, #1526 Data Furnisher Responsibilities under the FCRA, and #1522 Direct Disputes from Consumers to Furnishers under the FCRA.

As a result of a settlement agreement with multiple state attorneys general, in 2015, the three major CRAs (Equifax, TransUnion and Experian) announced the National Consumer Assistance Plan (NCAP). The plan impacts many aspects of the credit reporting industry including the reporting of delinquent debts. The requirements are being implemented nationwide, and will be phased in over three years with some mandates already in effect. The new reporting requirements that impact debt collectors and other furnishers are summarized below:

Requirements for Debt Collectors

• Report the original creditor name and the valid creditor classification code according to the Metro 2^® format. These fields are required for each account item reported (required by June 15, 2016).
• Do not report debt that did not arise from a contract or agreement to pay, including, but not limited to, certain fines, tickets, and other assessments. For example, library fees or fines, parking tickets, speeding tickets, and court fees or fines (required by June 15, 2016).
• To avoid potential deletion of data by CRAs, report a full file monthly including accounts that are open, that are paid in the last 90 days, or that require deletion or correction. (required by Sept. 15, 2016).
• CRAs are required to revise training materials and instruct new and existing collection agencies on accurately reporting and deleting accounts that are sold, transferred, or no longer managed by the reporting entity (required by June 8, 2016).
• Retirement of the Metro 1 format. Thereafter (at the end of a reasonable notice period provided to furnishers) the CRAs will no longer accept any data from furnishers utilizing the Metro 1 data reporting format. Rather all furnishers will need to use the Metro 2 format (required by June 8, 2018).

Medical Information Furnishers

• Do not report Medical Debt collection accounts (as defined by Creditor Classification Code 02) until they are at least 180 days past the Date of the First Delinquency with the original creditor that led to the account being sold or placed for collection (required by Sept. 15, 2017).
• Report a delete for accounts that are being paid by insurance or were paid in full through insurance (not by the consumer) (required by Sept. 15, 2017).
• CRAs must implement a process designed to remove or suppress known medical collections furnished by collection agencies from files within the CRAs’ databases when a medical debt is reported either as having been paid in full by insurance or as being paid by insurance (required by June 8, 2018).

General Requirements for Data Furnishers

• Prohibit furnishers from reporting authorized users without a date of birth (using month and year on new accounts and reject data that does not comply with this requirement) (required by June 8, 2018).

• Inform furnishers of the mandatory reporting requirement relating to additions of authorized users on newly opened accounts and rejection such data that is not provided with a date of birth using the month and year (required by Sept. 8, 2015).

For further information on NCAP please click here. For further information on reportable information, please see ACA SearchPoint document #3001 Reportable Information.

Section 623(a)(5) of the FCRA provides three methods for determining the date of delinquency that satisfy the requirement for accurate reporting (as long as the consumer does not dispute the information used to calculate the date).

1. The first allows the furnisher to use the same date of delinquency the original creditor previously reported, if the original creditor reported the debt. This is method is generally preferable, as the original creditor has direct access to the records needed to determine the date accurately.
2. The second method is to follow reasonable procedures to obtain the date of delinquency from the original creditor or other reliable source. The CFPB has not yet published regulations defining what an “other reliable source” may be, though it would be reasonable to assume these sources include a previous furnisher, a CRA or a purchaser of the debt.
3. The third method allows a furnisher to report an alternate date that undoubtedly precedes the actual date of delinquency. Under this method, a furnisher with little access to the original creditor’s records can follow a reasonable procedure to report an alternative to the actual date of delinquency. Thus, in cases in which the first two methods are not feasible, a furnisher may establish a policy of using the date of service as the date of delinquency, since that date undoubtedly precedes the actual date of delinquency. As long as this information is not disputed by the consumer, reporting the date of service satisfies the furnisher’s duty to provide accurate information.

For more information on the date of delinquency, review ACA SearchPoint document #1510 Date of Delinquency Reporting Requirements.

Generally, yes. In order to access someone’s credit report, you have to have a permissible purpose. There are a number of permissible purposes under the FCRA, including the collection of an account. Although the FCRA does not specifically define “collection of an account,” case law on this issue concludes that “collection of an account” is equivalent to the collection of a debt. Thus, a debt collector generally has a permissible purpose to obtain a consumer report for use in attempting to collect the consumer’s debt. However, a decision of the U.S. Court of Appeals for the Ninth Circuit found that in order to provide a permissible purpose for debt collection, the “debt” in question must be the result of a voluntary credit transaction. Therefore, at least in the Ninth Circuit, debts that did not arise from a voluntary transaction (e.g., parking tickets, fines, towing/impound charges etc.) do not provide a permissible purpose to access the consumer’s credit report.

For more information in permissible purposes generally, members can access ACA SearchPoint document #1154 Permissible Purposes under the FCRA. For more information on the Ninth Circuit case discussed above, including what types of debts may constitute a voluntary credit transaction, members may access ACA SearchPoint document #1163 Ninth Circuit Decision Impacts Collectors’ Ability to Obtain Consumer Reports.