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Financial Services Law Insights and Observations

CFPB tells CRAs, furnishers to investigate disputes

Agency Rule-Making & Guidance Federal Issues CFPB Consumer Finance Consumer Reporting Agency Credit Furnishing

Agency Rule-Making & Guidance

On November 10, the CFPB issued Circular 2022-07 to outline how federal and state consumer protection enforcers can bring claims against companies that fail to investigate and resolve consumer report disputes. According to the Bureau, consumer reporting agencies (CRAs) and some furnishers have failed to conduct reasonable investigations of consumer disputes. The Circular affirmed that CRAs and furnishers must reasonably investigate all disputes that they have not reasonably determined to be frivolous or irrelevant, and may be liable under the Fair Credit Reporting Act if they fail to do so. Additionally, the Circular noted that claims can be pursued by both state and federal consumer protection enforcers and regulators. The Circular also described that enforcers can “bring a claim if a consumer reporting agency fails to promptly provide to the furnisher ‘all relevant information’ regarding the dispute that the consumer reporting agency receives from the consumer.” On the topic of whether CRAs need to forward to furnishers consumer-provided documents attached to a dispute, the Circular noted that “[i]t depends.” The Circular then explained that even “[w]hile there is not an affirmative requirement to specifically provide original copies of documentation submitted by consumers, it would be difficult for a consumer reporting agency to prove they provided all relevant information if they fail to forward even an electronic image of documents that constitute a primary source of evidence.”