Industry Responds: Issues Affecting Accuracy in Credit Reporting

Comments to FTC and CFPB outline ACA International’s perspective on consumer reports and dispute processes following members’ participation in December workshop.

1/21/2020 10:00 AM

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Industry Responds: Issues Affecting Accuracy in Credit Reporting

Consumer education, amendments to the Fair Credit Reporting Act and using new technologies and data management practices are among ACA International’s suggestions to the Federal Trade Commission and Consumer Financial Protection Bureau following the Accuracy in Credit Reporting workshop in December.

ACA members LaDonna Bohling, IFCCE, chief compliance officer at Receivable Solutions Inc., and Leslie Bender, IFCCE, CCCO, chief strategy officer and General Counsel at BCA Financial Services Inc., also helped inform the regulators as panelists during the workshop.

ACA submitted comments, informed by the Members Attorney Committee and Federal Affairs Commitee, with feedback and suggestions for the regulators on behalf of members and the industry Jan. 20.

The FTC and CFPB sought comments on issues affecting the accuracy of traditional credit reports. ACA responded to several questions to share the industry’s perspective on credit report inaccuracies, reporting medical debt, robo-dispute letters and more.

Highlights from ACA’s comments include:

What are the experiences of victims of identity theft in the dispute process?

Many consumers have legitimate claims but there are also many fraudulent claims. In the experience of ACA members, often true identity theft claims can get mixed with real and accurate debt, which the consumer does not recognize. Consumers are required to report identity theft to the police to support the legitimacy of their claims. Many do not do this, which can lead to problems when asking creditors to forgive debt. It is not uncommon for some consumers to allege identity theft and claim to have filed police reports, without doing so. There have been many instances of consumers presenting evidence of a “report” that was not actually filed. True identity theft claims can arise from conduct by unknown third parties, as well as people known to the consumer, including children, siblings, or friends. When identity theft was committed by a person known to the consumer, consumers can be reluctant to identify these known individuals, and can also be reluctant to provide such information to the police. Consumer education might be useful. ACA encourages the FTC to provide resources educating consumers on the need to file a police report, the need to identify the party that committed the identity theft—even when that person is a relative or friend—and the need to be aware of how identity theft happens and how to prevent and reduce the risk of identity theft.

Feedback on robo-dispute letters:

Robo-disputes are being sent in bulk (hundreds at a time in the same envelope), often without the knowledge of the consumer, as a bad-faith tactic to bully creditors and/or debt collection agencies into abandoning attempts to collect a debt. This causes legitimate businesses to exert an enormous amount of time and resources to process and/or respond to these false disputes. Notably, these false disputes are simply the initial step toward Fair Debt Collection Practices Act litigation. These robo-disputes are often sent by consumer attorneys in the hopes that a mistake will be made by agencies trying to respond to the mass robo-disputes. This is a disservice to consumers, many of whom do not dispute the debt and are in fact willing to resolve the debt in an effort to improve their credit. Indeed, many agencies have had consumers call in to discuss payment on their debt only to be told that they are disputing the debt or have retained counsel–both of which are a surprise to the unknowing consumer.

What government measures (including changes in the law) and private sector measures could improve accuracy? What are the costs and benefits of these possible measures?

ACA members have suggested that the FCRA should be amended to allow disputes made through credit reporting agencies to be categorized as frivolous or repetitive disputes, like those made directly to the data furnisher. In addition, while data furnishers have no duty to reinvestigate frivolous disputes, they should also have no duty to respond to them. This would greatly reduce the resources expended on these disputes, decrease the manufactured lawsuits filed, and decrease the number of robo-disputes once the bad actors realize they cannot simply force a data furnisher into settlement or debt forgiveness. In addition, federal regulators should closely monitor the activities of credit repair companies and consumer lawyers known for robo-disputes.

Read ACA’s complete comments through the online Advocacy Resource Center.

ACA appreciates its members’ input for the comments, and there is still time to respond directly to the FTC before the Jan. 31 deadline.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Industry Responds: Issues Affecting Accuracy in Credit Reporting

Consumer education, amendments to the Fair Credit Reporting Act and using new technologies and data management practices are among ACA International’s suggestions to the Federal Trade Commission and Consumer Financial Protection Bureau following the Accuracy in Credit Reporting workshop in December.

ACA members LaDonna Bohling, IFCCE, chief compliance officer at Receivable Solutions Inc., and Leslie Bender, IFCCE, CCCO, chief strategy officer and General Counsel at BCA Financial Services Inc., also helped inform the regulators as panelists during the workshop.

ACA submitted comments, informed by the Members Attorney Committee and Federal Affairs Commitee, with feedback and suggestions for the regulators on behalf of members and the industry Jan. 20.

The FTC and CFPB sought comments on issues affecting the accuracy of traditional credit reports. ACA responded to several questions to share the industry’s perspective on credit report inaccuracies, reporting medical debt, robo-dispute letters and more.

Highlights from ACA’s comments include:

What are the experiences of victims of identity theft in the dispute process?

Many consumers have legitimate claims but there are also many fraudulent claims. In the experience of ACA members, often true identity theft claims can get mixed with real and accurate debt, which the consumer does not recognize. Consumers are required to report identity theft to the police to support the legitimacy of their claims. Many do not do this, which can lead to problems when asking creditors to forgive debt. It is not uncommon for some consumers to allege identity theft and claim to have filed police reports, without doing so. There have been many instances of consumers presenting evidence of a “report” that was not actually filed. True identity theft claims can arise from conduct by unknown third parties, as well as people known to the consumer, including children, siblings, or friends. When identity theft was committed by a person known to the consumer, consumers can be reluctant to identify these known individuals, and can also be reluctant to provide such information to the police. Consumer education might be useful. ACA encourages the FTC to provide resources educating consumers on the need to file a police report, the need to identify the party that committed the identity theft—even when that person is a relative or friend—and the need to be aware of how identity theft happens and how to prevent and reduce the risk of identity theft.

Feedback on robo-dispute letters:

Robo-disputes are being sent in bulk (hundreds at a time in the same envelope), often without the knowledge of the consumer, as a bad-faith tactic to bully creditors and/or debt collection agencies into abandoning attempts to collect a debt. This causes legitimate businesses to exert an enormous amount of time and resources to process and/or respond to these false disputes. Notably, these false disputes are simply the initial step toward Fair Debt Collection Practices Act litigation. These robo-disputes are often sent by consumer attorneys in the hopes that a mistake will be made by agencies trying to respond to the mass robo-disputes. This is a disservice to consumers, many of whom do not dispute the debt and are in fact willing to resolve the debt in an effort to improve their credit. Indeed, many agencies have had consumers call in to discuss payment on their debt only to be told that they are disputing the debt or have retained counsel–both of which are a surprise to the unknowing consumer.

What government measures (including changes in the law) and private sector measures could improve accuracy? What are the costs and benefits of these possible measures?

ACA members have suggested that the FCRA should be amended to allow disputes made through credit reporting agencies to be categorized as frivolous or repetitive disputes, like those made directly to the data furnisher. In addition, while data furnishers have no duty to reinvestigate frivolous disputes, they should also have no duty to respond to them. This would greatly reduce the resources expended on these disputes, decrease the manufactured lawsuits filed, and decrease the number of robo-disputes once the bad actors realize they cannot simply force a data furnisher into settlement or debt forgiveness. In addition, federal regulators should closely monitor the activities of credit repair companies and consumer lawyers known for robo-disputes.

Read ACA’s complete comments through the online Advocacy Resource Center.

ACA appreciates its members’ input for the comments, and there is still time to respond directly to the FTC before the Jan. 31 deadline.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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