Since I was looking at the FTC published opinion letters, and the lack of reasonable procedures are a significant part of my claims against the CRAs, I'll summarize the FRC publications:
"...
Section 607(b) of the FCRA requires credit bureaus "to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." In our view, it is not a reasonable procedure to label an account that has been discharged in bankruptcy as "charged off as bad debt" if the account was open and not charged off when the consumer filed bankruptcy. Such a designation would be inaccurate or misleading, because it would indicate that the creditor had written off the account at the time of bankruptcy when it had not in fact done so.
..."
This letter is about whether a company assembling criminal records is a CRA - not applicable to my situation.
"... Section 623(a)(2) of the FCRA addresses the duty to correct and update information by "furnishers," or persons who furnish information to consumer reporting agencies ("CRA") such as credit bureaus. In particular, this section requires a person that "has furnished to a consumer reporting agency information that the person determines is not complete or accurate" to "promptly notify the consumer reporting agency of that determination" and provide any information needed to make it complete and accurate.(1) Thus, on its face, this provision requires a furnisher to provide corrected or updated information to the consumer reporting agency that it had reported to originally. A furnisher that reports current information to a different CRA has done nothing to "correct and update information" with CRA that possess the information that the furnisher has now determined is incomplete or erroneous. This duty extends to all student loan accounts reported to CRAs, regardless of whether they were accurate at one point, because the section requires the furnisher both to "update" accounts as well as to "correct" those that were erroneous when submitted to the CRA.
Section 607(b) of the FCRA requires CRAs to "follow reasonable procedures to assure maximum possible accuracy of information" in their consumer reports. It is our view that a CRA that refuses to accept updated and corrected information from a furnisher on student loan accounts, if it still maintains that information in its database, does not have in place "reasonable procedures" to comply with this section with respect to such accounts.
..."
This letter is very important because it clearly establishes that an account that was charged off PRIOR to a Ch. 7 discharge MUST be updated to reflect the subsequent discharge.
It also implies that a CRA REFUSED to accept updates, I'd sure like to know who that was.
"Dear Mr. McCorkell:
This responds to your letter concerning the application of the Fair Credit Reporting Act ("FCRA") to an account that is reported to a consumer reporting agency ("CRA") by a creditor, when the account is discharged in bankruptcy and charged off by the creditor, either before or after the discharge. You note that a staff opinion letter (Lovern, 4/24/98) stated that a credit bureau would violate Section 607(b) of the FCRA if it reported a discharged item as a chargeoff when it was in fact not charged off. You state that (contrary to a comment attributed by Mr. Lovern to a Fair Isaac source in his letter to us) your risk scores assign the same number of points to a bankrupt tradeline regardless of whether that account is also reported as charged off.
Specifically, you ask if we concur in your view that "nothing in the FCRA (a) prohibits a creditor from 'charging off' an account, whether before or after the filing of a bankruptcy; (b) prohibits a creditor from reporting to a CRA that an account which has been discharged in bankruptcy has also been charged off so long as the credit grantor has in fact charged off the account; or (c) or prohibits a CRA from reporting an account which has been discharged in bankruptcy as also having been charged off if the creditor has so reported the account to the CRA and the CRA has no reason to believe otherwise." We agree that the FCRA prohibits none of those practices in the circumstances you describe.
The opinions set forth in this informal staff letter are not binding on the Commission." [emphases added]
This is about the obligations imposed by Section 623(a) on furnishers of information to CRAs and the responsibilities of CRAs under Section 607(b).
"Section 607(b) was not changed by the CCRRA. It remains in the same form as when the FCRA became law on October 26, 1970. Congress left Section 607(b) intact when it rewrote the FCRA in 1996, and on several other occasions when it amended the statute over the years. Despite some deficiencies in Section 623(a) from the consumer perspective, it does impose accuracy duties on furnishers where none existed prior to the effective date of the CCRRA. Nothing suggests that, in prescribing obligations for furnishers for the first time, Congress intended to change CRA duties under Section 607(b). Therefore, it is our view that the duties of CRAs under Section 607(b) were neither expanded nor reduced by the addition of Section 623 by the CCRRA.
The opinions set forth in this informal staff letter are not binding on the Commission."
It is important that none of these letters are binding and that they are from the 90s.
Thank Bush for selling consumers out to international conglamerates!
1/26/04: My reply to the FTC/FCC motion to dismiss + exhibits
Posted by Christine at March 14, 2004 06:36 PM