Many, many folks would like to know exactly how the credit bureaus handle a consumer dispute. The following is testimony before the subcommittee on Financial Institutions and Consumer Credit of the Committee on Financial Services. This excerpt from the full testimony gives a pretty good insight into how the creditors and bureaus have basically been playing a “shell” game at the cost to consumers and their credit and their finances. (The full report is here)
Approximately 80% of all consumer disputes received by the credit reporting agencies
are made in writing. The remaining 20% come in by telephone. Each agency has a different
process for handling these disputes, but all three use a similar system.
The three bureaus collaborated through their trade organization to automate the entire reinvestigation process using an online computer program, E-Oscar. Upon receiving a written dispute, often in the form of a detailed letter with documents attached, the CRA assigns the dispute to its dispute department. The employees within the department are usually hourly employees and are minimally paid. In the case of Equifax, things are even worse. The CRA contracts out its FCRA responsibilities to a foreign company based in Jamaica which uses only foreign labor for its “investigations.”
The job of a CRA dispute department employee, even if titled “investigator,” is solely data entry. No matter how detailed the written dispute, the CRA will merely translate it into a two digit code and, usually by automated means (ACDV), send a message to the furnisher/creditor identifying the code its employee believes best describes the dispute. The employees of all three CRAs operate under a quota system whereby each employee is expected to process all of the disputes of an individual consumer in less than four minutes. Worse still, the “codes” used by both the CRAs and their subscribers (the furnishers) are limited in number and rarely describe the actual basis for the consumer’s dispute.
For example, in two of my recent cases, both identical, consumers Van Evans and Ray Bailey wrote dispute letters to all three bureaus. The disputes were conveyed in great detail and explained that the consumers were not responsible for the disputed accounts and that any signatures claimed to be theirs were forgeries. Each consumer dispute letter also enclosed copies of handwriting exemplars such as signatures on driver’s license, military ids and other credit cards. Van Evans had also obtained a copy of the forged note and included it in his dispute letter. When Equifax and Trans Union received the letters, their employees simplified the disputes to a code and the description “not his/hers.” This was all the furnishers received.
In a deposition taken in a Pennsylvania case, Trans Union’s responsible employee explained the CRA’s “investigation procedure.”
Q . . . [T]he dispute investigator looks
9 at the consumer’s written dispute and then
10 reduces that to a code that gets transmitted
11 to the furnisher?
12 A. Yes.
13 Q. Does the furnisher ever see the
14 consumer’s written dispute?
15 A. No.
Q. Are there any instances in which the
22 dispute investigator would call the consumer
23 to find out more about the dispute?
24 A. No.
This is consistent with CRA testimony in every other case of which I am aware. The Bureaus do not convey the full dispute or forward any of the documents to the furnishers. As an expected result, nearly all consumer disputes are verified against the consumers. <end excerpt>
As we have stated repeatedly, it is a travesty that consumers have few options but to sue the CRA’s to get justice. It seems to me that Congress should consider raising the monetary penalty from $1000 per reporting to $10,000 or more and put a watchdog force to audit the CRA’s on a regular basis.
We continue to find that the CRA’s refuse to thoroughly investigate any reporting other than to confirm information with the furnisher/creditor. They will not go to the length of gathering and reviewing original documentation which the FCRA evinces and courts in every state have upheld.
Here is an additional report from National Consumer Law Center. “Industry Wide Failures In Handling Errors In Credit Reports“.
If you feel your credit rights have been violated, feel free to contact us for a free consultation. We may be able to assist you in finding a Consumer Advocate Attorney who specializes in credit law.