The Consumer Financial Protection Bureau and the Federal Trade Commission say that a 2021 federal court decision could limit protections for consumers looking to remove errors on their credit reports.
In a court filing this week, the two agencies argued that the ruling "undercuts a central remedial purpose" of the Fair Credit Reporting Act. The law requires banks, mortgage lenders, debt collectors and other companies that furnish information used in credit reports to investigate any disputes and correct errors.
The case involves a Pennsylvania man, Stefan Ingram, who reported that a Comcast account opened under his name was fraudulent.
Ingram's debt under the account was sent to a debt collection agency. After Ingram's lawyer asked for the information to be scrapped from his credit report, Comcast asked for a police report and determined that the account wasn't fraudulent absent more information.
Ingram sued Equifax, Experian and Comcast as part of the original lawsuit, and he settled with those companies in 2019.
Last year, a federal judge ruled sided with the remaining defendant, the debt collector Waypoint Resources Group. The judge wrote that Ingram had "failed to provide sufficient information" so that Waypoint could investigate the issue, calling his complaint "frivolous."
Now the CFPB and FTC are taking issue with the ruling. They submitted a "friend of the court" brief with the U.S. Court of Appeals for the Third Circuit, where Ingram's lawyers are hoping to get the earlier decision overturned.
The two federal agencies argued that the law is clear that companies that furnish information to credit reporting agencies must investigate any disputes. They also wrote that the judge's ruling could lead to companies not advising consumers that their dispute was deemed frivolous, thereby "leaving consumers in the dark."
"Allowing furnishers to reject purportedly frivolous disputes risks opening a loophole to this rule, whereby consumers may never be advised of the outcome of their disputes and will not be provided the information necessary to cure any deficiencies," the CFPB wrote in a
Consumer complaints relating to credit reports would likely increase as a result, the two agencies wrote in their filing.
The nation’s six largest credit card companies are facing questions from the Consumer Financial Protection Bureau over their alleged failure to report customer payment data on a regular basis. The agency says that the industry’s practices can hurt consumers’ ability to qualify for cheaper loans.
The CFPB has
The Consumer Data Industry Association — which represents the credit bureaus Equifax, Experian and TransUnion — has
