CHAPTER EE

How to Make a Credit Reporting Dispute in Ten Easy Steps.

Leonard A. Bennett
Consumer Litigation Associates, P.C.
12515 Warwick Boulevard
Newport News, Virginia 23606
(757) 930-3660
lenbennett@cox.net 1

OVERVIEW
Few areas of consumer advocacy, if any, are growing, developing and changing as
rapidly as Fair Credit Reporting Act (FCRA) litigation. Not only does the case law continue to
form in varied and sometimes conflicting ways, but the credit industry, and the defenses used by
it, is equally adaptive. Nevertheless, one constant has become clear: The most prevalent
defenses, and often the ones to which Courts are most receptive, arise from the manner in which
a consumer conveys a dispute about the underlying inaccuracy in their credit report.

In this

article, I offer my thoughts, conclusions and advice on how a consumer should dispute such
erroneous information. Given limitations of time and space, I have not detailed the underlying
case law and developments which have informed my opinions. However, in the next edition of
the NACA Newsletter, Matt Erausquin and I will provide a comprehensive overview of the
Seventh Circuit case law which has created the need for this analysis. In this article we explain
the practice and philosophy used by my office when

handling this important dispute

requirement.

This outline was prepared with the contribution of a friend and FCRA colleague, DAVID A. SZWAK,
Esq., Bodenheimer, Jones, Szwak & Winchell, 401 Market Street, Ste. 240, Shreveport, Louisiana 71101, 318-4241400, WWW.BJSWLAW.COM.
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Nearly all FCRA litigation will be brought pursuant to one or more of the statutory
provisions enacted to help consumers obtain correction or removal of inaccurate information in
their credit reports.

Section 1681i governs the consumers dispute when it is made to the

consumer reporting agency (CRA).

This section imposes a number of procedural and

substantive requirements on the CRA which are discussed below In 1996, Congress enacted a
companion provision, 1681s-2(b), which imposes several requirements on creditors/furnishers
when they receive notice of a consumers 1681i dispute made initially to a CRA.
Nearly all FCRA accuracy litigation implicates one or both of these sections.

threshold requirement for each claim is that the defendant must have received notice of the
consumers dispute.
In practice, this threshold requirement has become one of the three defenses relied on
most heavily by defendants. These defenses most typically are: 1. Defect in the dispute or the
notice of the dispute, 2. purported accuracy of the disputed item , and 3. whether the the FCRA
violation caused damage to the consumer).
# 1:

Send the Furnisher a Copy of the Dispute

In response to FCRA suits furnishers are now claiming that they did not receive adequate
notice of the consumers dispute. The cause of this problem is the fundamental nature of the
credit industrys Automated Consumer Dispute Verification ( ACDV) system which causes a
difficult dilemma for consumers. If the consumer does not make her dispute indirectly, (by
sending it to the CRA and thereby subject to 1681i, but instead sends it directly to the furnisher,
[under 1681s-2(a)] there is no private right of action. 15 U.S.C. 1681s-2(c) and (d).
However, if the consumer sends a detailed, and well-documented, dispute directly to CRA, she
has little control over what information the CRA will then forward to the furnisher. Under the
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CRAs typical procedures, the consumers dispute will be reduced to a one page, electronic
ACDV with the underlying dispute summarized to a generic two-digit dispute code (e.g. 01 not
his/hers) and in some circumstances, a short, one-line paraphrase of some aspect of the dispute
under the heading FCRA Relevant Information (e.g. Consumer states belongs to husband
only). Furnishers have begun defending 1681s-2(b) claims by arguing that they did not
receive adequate notice of the consumers dispute. The logical response to this problem is to
pursue a claim against the CRA under 15 U.S.C. 1681i(a)(2), which requires the itto forward to
the furnisher all relevant information provided by the consumer. However, reliance upon the
all relevant information claim prevents a settlement with the CRA and pursuing solely a
furnisher case.
Additionally, the CRA defendants are generally better prepared to defend FCRA suits
and are usually more formidable opponents than the furnishers. The development of this defense
strategy has caused us to reevaluate my previous insistence that dispute letters not be copied to
the furnisher.
#2:

Make the Dispute Letter as Detailed as Possible

I have also changed my opinion as to how detailed and well-documented a consumer

should make their dispute. My current view is that dispute letters should be as complete,
detailed and well-documented as a consumer can make them. The internet is filled with pro se
advice and attorney websites which suggest the tactic that consumers make frequent and shallow
disputes in the hope that the CRA will not timely process them and thus have to delete the
targeted account. Five years ago this tactic may have had some success, however it is no longer
viable The CRAs have now completed the transition to full-automation and all ordinary
disputes are processed electronically through the E-Oscar system. These credit repair type
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letters (e.g. a dispute which merely states, This is not my account. Take it off my credit
report.) have become virtually the entire focus of the CRA dispute processing system. Much, if
not most, of the ACDV process is designed to receive code and turn around such generic
disputes within minutes, if not seconds. The days of telephoned, mailed or faxed Consumer
Dispute Verification forms (CDVs) are long past. The credit repair model was an attempt
to overload the CRA system, thereby forcing the deletion of the disputed information because of
the time requirements imposed by the FCRA. However, CRAs can now process disputes almost
as quickly as they can open the envelopes they arrive in. In fact, the CRAs have created two
alternative methods of receiving disputes which enable consumers to do this coding for them.
Internet disputes and disputes made by completing the check-box dispute forms sent by the
CRAs with a consumers free credit report force the consumer to chose one of a handful of
dispute codes and thus require even less time for the CRAs to process.
For many consumer advocates, familiar with the Truth in Lending Act and the Fair Debt
Collections Practices Act there may be a temptation to view the dispute requirement merely as a
technical threshold requirement, used simply to trigger liability. However, the FCRA is different
because it does not provide for strict liability. Throughout the FCRA, the Court and jury are
asked to determine the reasonableness of the defendants conduct or whether it was negligent.
While sending a dispute is a condition precedent for liability, it is not, in and of itself, the only
condition necessary to trigger liability. The dispute also has to fairly and adequately advise the
CRA and/or the furnisher so that a reasonable person in their shoes can conduct a meaningful
investigation. Thus, CRAs will not be held liable for ignoring credit repair gotcha-type
letters.
#3:

Either Draft the Dispute Letter, or Assist the Consumer in doing so

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There has also been a great deal of controversy about whether the consumers attorney
should be involved in writing, or even coaching the dispute letter. Previously I believed the
attorney should draft the dispute, for several reasons. Given the importance of the dispute letter,
and the fact that it would become the primary target of the CRA, it had to be written by a lawyer
. I doubt that this was ever the intent of the FCRA drafters, and it is a terrible indictment of the
credit reporting industry.

Consumer drafted letters which may otherwise seem clear and

complete to a lay person may still be vulnerable to a CRA defense when subjected to the more
rigorous challenges of a defense attorney. Like a commercial contract, settlement agreement,
pleading or other important legal document, good legal advice can make a dispute letter better,
and maybe even bullet-proof. Given that I would often be writing the letters, or directly assisting
my clients in doing so, I did not believe that it was appropriate to ghost-write them. I did not
want to confront a jury who could see through the letter and know it was attorney written. I
would rather rely on the argument that The consumer sought legal help, had an attorney write
the dispute and the CRA still ignored it. I would draft and sign the letter. However, I would
then provide it to the consumer so that she could mail it herself. This avoided any attorney as
witness problems, as I was not the person who mailed the letter
Unfortunately, my clients disputes, written on my attorney letterhead, became a
problem. About two years ago, the CRAs began to handle attorney letters as if they were from
possible credit clinics. Even consumer disputes from my office, where we do no credit repair,
received such treatment. When the CRA codes a dispute in this manner, it greatly weakens the
consumers furnisher case, as the ACDV will not provide any explanation of the dispute. The
furnisher will merely be asked to verify all information. Faced with this problem, but still
unwilling to ghost write a letter which could appear to deceive, we now begin our clients
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dispute letters with the statement, My attorney gave me this letter to send to you so that I may
dispute inaccurate information in my credit report. I expect that as the CRAs adapt, this
sentence will need to change and this disclosure may need to go deeper in the letter, so that my
client can obtain more reasonable handling of the dispute. So far this disclaimer has been
effective.
Providing the consumer with the dispute letter, or giving them legal advice so that they
may properly do so, permits the attorney to add certain information which would otherwise not
be appropriate. For example, based on successes we had in prior cases where a general practice
attorney had included references to the Johnson v. MBNA verdict,, we have begun telling our
clients about it as well as

Cushman v. Trans Union. In their dispute letters, our clients will

often include the statement: My attorney provided me two court cases to read so that I could
understand how this dispute should be handled. I have enclosed copies of the Cushman v.
TransUnion and Johnson v. MBNA decisions, so that you can also have them available. If the
dispute is unsuccessful, as most unfortunately are, these letters, with the enclosed opinions will
make effective trial exhibits to show notice to the CRA. Similarly, our clients often include
warnings about prior litigation and cases involving the same furnisher. Or, they may express
concerns about the ACDV system and specifically ask for manual processing. In each instance,
we are attempting to place the CRA on sufficient notice so that a Court will understand that it did
not act reasonably.

If you have your client explain that they had assistance in drafting the

letter, it is less likely to appear disingenuous to a jury. Certainly, most jurors can understand
that consumers go to a lawyer when they have a legal problem.
#4:

Tell the CRA what it could do Differently

The E-Oscar system never results in a reasonable investigation.

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When a CRA claims

that it acted reasonably, you need to be able to explain otherwise. We should point to specific
options the CRA failed to choose. My clients send the CRAs letters which provide a suggested
path for the bureau to follow if it truly wanted to conduct an actual investigation. To do this
consumers should enclose all relevant documents to support their dispute. In a dispute over
ownership of an account, clients should request that the CRA obtain a copy of the underlying
application or contract from the furnisher. I also suggest that clients provide several handwriting
samples at the bottom of the letter as well as copies of cancelled checks, the backs of credit
cards or their drivers license which includes their signature. CRAs often claim that it would be
unreasonable to expect them to pay for a handwriting analysis. To avoid this, my clients offer to
pay the cost of a handwriting expert. In some circumstances, we include the name and contact
information for such experts.
Consumers can also can provide the name and contact information of third-party
witnesses who support their dispute. For example, if our client has been in direct contact with a
furnisher representative who has been helpful to them, or who understands, and agrees with their
position the dispute letter will provide the name and address of that person, and a request that
they manually send the dispute directly to that person rather than through E-Oscar. If the
dispute concerns a public record the letter will include the name and telephone number of the
court clerk. If there was prior litigation involved, the dispute letter will include the name and
telephone number of the attorney who previously represented the creditor.
#5:

Eliminate Ambiguities

We know that the CRAs will try to attack a consumers dispute letter for the flimsiest
reasons. so we attempt to eliminate all of the issues we know cause problems by doing the
following:

Include the consumers full name, current address and Social Security number.
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Even though it is illegal, Experian will reject a consumers letter if it does not include a Social
Security number. Dont give the CRA an excuse to ignore the letter.
#6:

Disputes should be sent by certified mail, return receipt.

CRAs often claim they never received a consumers dispute or that it got lost. Even
though the consumer retains the mailing presumption, this still leaves them with only a
negligence case. If the CRA can claim it never got the letter it will argue that it merely made a
mistake, instead of being forced to defend a claim that its procedures are illegal.
#7:

Make the dispute an affidavit

Having the consumer sign the dispute under oath converts it into an affidavit, with
several resulting benefits. It makes the consumer seem more credible than the furnisher, who
typically sends an automated, unsworn response. And, it advances the all relevant information
claim against the CRA. Furnishers often have policies which give greater weight to consumer
affidavits and thereby more readily accept the consumers version of the dispute and resolve it in
their favor.. In fact, the FCRA requires them to do so in identity theft disputes.

The CRAs

failure to forward the affidavit to the furnisher however, strengthens an all relevant
information claim under 1681i against the CRA. Finally, the dispute affidavit makes a ready
exhibit to defeat a summary judgment motion.
#8:

Tell the CRA the result the consumer wants

As obvious as this appears, many pro se disputes, and even a few from attorneys, omit
any request that the CRA investigate and delete or correct a particular inaccuracy. Consumers
often write and merely complain, merely telling the CRA that they are angry or upset that the
creditor continues to report the disputed account.
#9:

Properly and fully identify the disputed information.

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The CRAs often take consumer disputes literally, when it suits their purposes. If the
consumer states, I have never had a MBNA credit card, so delete MBNA account #1234," the
CRA will only address that account. This is a problem because many furnishers will change
their account numbers after an initial dispute is made, leaving new and multiple tradelines
reported for the single account. These are then ignored by the CRA because they are not
referenced in the dispute letter. Alternatively, the consumer may not know the account number
that has actually been reported in their credit file. It could be different than the one provided in
the bill or statement. To prevent these problems describe the full range of accounts covered by
the dispute. For example, a consumer could state, I have never had a MBNA credit card. Any
MBNA account in my credit file is not mine and should be deleted. This includes account
number 1234, as well as any other account you may be reporting as well as any account that may
be reported by any debt collector who is reporting a debt originating from a MBNA account.
For First USA accounts, which became Bank One and then Chase accounts, a consumer could
state, I am disputing the First USA account #2345. It may also be reported as a Bank One or a
J.P. Morgan Chase account.
#10:

Consult www.MyFairCredit.com.

I am fairly certain that there is much more which I have omitted. I am just as certain that
the CRAs will continue to adapt to the improvements and greater quality of the dispute letters
our clients are sending. Nevertheless, this is a start. Given the challenges we often face on
causation and damages from the CRAs, it is critical that a consumer be able to avoid having to
fight through defense attacks on this second front. While I have not offered any forms or sample
disputes in this article, we have continued to place them within www.MyFairCredit.com. As we
make further refinements and changes to our advice, we will provide those improvements there
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as well.

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SAMPLE DISPUTE LETTERS:

SAMPLE ONE: The Consumer is not the person responsible to pay the debt.
CONSUMER NAME AND ADDRESS
Experian Information Solutions, Inc.
P.O. Box 2104
Allen, Texas 75013

Equifax Information Services, Inc.

P.O. Box 740241
Atlanta, Georgia 30374

Trans Union
P.O. Box 2000
Chester, Pennsylvania 19022
Re:

Name:
SSN:
DOB:
Current Address:

Dear Sirs:
My attorney provided me this letter to send you so that I may properly dispute inaccurate information in
my credit report under the Federal Fair Credit Reporting Act. [PROVIDE DETAIL. EVERY LAST WORD YOU
CAN USE TO EXPLAIN THE EVENTS, CIRCUMSTANCES AND FACTS REGARDING YOUR DISPUTE
FOR EXAMPLE, IF YOU ARE DISPUTING CREDIT CARDS OPENED BY YOUR EX-SPOUSE as in Johnson
v. MBNA]: My estranged wife husband=s name is ____________ . I have not been in contact with her for awhile. I
believe that she may have been the person who applied for and used the following credit cards. None of these are
mine. These accounts have shown up on my credit reports: __________________
Either these accounts were only hers, and you mistakenly added them to my reports, or else they were
opened in my name without my permission. Either way, I do not owe any money for these accounts. Accordingly,
please correct my credit history as detailed above. I have enclosed copies of my signature. Please obtain a copy of
whatever application, agreement or other basis the above companies claim supports their assertion that I owe on
their accounts and compare my signature to those within these documents. If you need me to do so, I will pay your
cost for a handwriting expert. Also, please send a copy of this letter and attachments to your customers when you
convey my disputes. If you are not willing to do so, please immediately provide me the name, address and telephone
numbers of the people you deal with at these companies so that I can send the documents myself, to a person who
can actually consider these explanations.
Also, please call me immediately if you need or will accept additional
information to support my disputes. My cell phone is (___) ___-____ and my home phone is (___) ___-____. To
further verify the information in this letter, you can also contact my [SISTER, NIEGHBOR, FRIEND, ETC.] at
__________________.
Please investigate and remove the derogatory information contained in my credit files immediately. Before
you continue to report any further information regarding this matter, please contact me at the above address,
telephone or email in order that I may supply you with any other information which you may find helpful. Thank
you very much in advance for your time and help,
Sincerely,
CONSUMER
STATE OF __________
City/County of ____________________
Subscribed to and sworn before me this _________ day of __________, 2006.
____________________________
NOTARY PUBLIC
My Commission Expires:
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SEAL

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SAMPLE TWO: The Consumer has already litigated and won or settled a claim on an automobile loan.
CONSUMER NAME AND ADDRESS
Experian Information Solutions, Inc.
P.O. Box 2104
Allen, Texas 75013

Equifax Information Services, Inc.

P.O. Box 740241
Atlanta, Georgia 30374

Trans Union
P.O. Box 2000
Chester, Pennsylvania 19022
Re:

Name:
SSN:
DOB:
Current Address:

Dear Sirs:
My attorney provided me this letter to send you so that I may properly dispute inaccurate information in
my credit report under the Federal Fair Credit Reporting Act. You are reporting incorrect information within my
credit files, namely the collection account with _______ Automotive Acceptance Corporation, shown as a charge
off with a past due balance of $1,574.00. I filed a lawsuit in the ______________ Circuit Court against _________
Auto Brokers and _______________ in 1999 after purchasing a vehicle from __________________. The lawsuit
was brought against both companies for claims of breach of contract, violation of VCPA, Virginia Motor Vehicle
Code, Federal Odometer Law and the Magnuson-Moss Act. The lawsuit was settled in May, 2002.
There is a settlement agreement between the above companies and myself which states as follows:
A__________ and ________________ shall, within fifteen (15) days of receipt of an executed original of
this release, remove or cause to be removed any and all negative or delinquency entries previously reported by or
for _________________ or ___________to any credit reporting agencies upon the credit history of _____@.
You may verify the Court filings by contacting the Clerk of the __________ Circuit Court at (___) _______. The style of the case is ADixie ___ v. _____ Auto Brokers, Inc. and ___________ Automotive Acceptance
Corporation@, Law Number _____________.
You may also verify the settlement by contacting the defense attorney, ______________. at _____, _____
& ____, ____________ Street, _____, Virginia 23___. His telephone number is (___) ___-____. Please
investigate and remove the derogatory information contained in my credit files immediately. Before you continue to
report any further information regarding this matter, please contact me at the above address in order that I may
supply you with any other information which you may find helpful. Also, please call me immediately if you need
or will accept additional information to support my disputes. My cell phone is (___)
and my home phone
is ( ) - .
Sincerely,
CONSUMER
STATE OF __________
City/County of ____________________
Subscribed to and sworn before me this _________ day of __________, 2006.
____________________________
NOTARY PUBLIC
My Commission Expires:
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SEAL

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SAMPLE THREE The Consumer has already discharged the debts in Bankruptcy.
CONSUMER NAME AND ADDRESS
Experian Information Solutions, Inc.
P.O. Box 2104
Allen, Texas 75013

Equifax Information Services, Inc.

P.O. Box 740241
Atlanta, Georgia 30374

Trans Union
P.O. Box 2000
Chester, Pennsylvania 19022
Re:

Name:
SSN:
DOB:
Current Address:

Dear Sirs:
My attorney provided me this letter to send you so that I may properly dispute inaccurate information in
my credit report under the Federal Fair Credit Reporting Act There is a lot of inaccurate information in my credit
report. Please investigate and correct the following information:
1. I filed a Chapter 7 bankruptcy in April 2006. Trans Union is incorrectly reporting this as July 2006.
The case number is: ___________________ in the Eastern District of Virginia. Please correct the date.
2. There are many accounts in my report which are for debts on which I obtained a complete discharge in
bankruptcy. Please review the bankruptcy records for the case I listed above through your online access and
through the Bankruptcy pleadings I have attached. The following tradeline accounts should be showing discharged
in bankruptcy as of April 2006, with no balance: _________________
3. There are many accounts in my report which are for debts on which I obtained a complete discharge in
bankruptcy. Please review the bankruptcy records for the case I listed above through your online access. Many of
these accounts are showing dates opened which are after the bankruptcy. This is also incorrect. These accounts
were pre-bankruptcy debts and should never have been reported as collections. Please obtain the underlying
documents from the collection company and you will see this is true. The following collection accounts should be
showing discharged in bankruptcy as of April 2006, with no balance: _____________
4. Judgment - _______ - This was discharged in bankruptcy.
Again, please investigate these inaccuracies and delete them immediately from my credit file. You may also verify
the settlement by contacting my bankruptcy attorney, ______________ Street, Norfolk, Virginia 23510. His
telephone number is (757) ___-____. Before you continue to report any further information regarding this matter,
please contact me at the above address in order that I may supply you with any other information which you may
find helpful.
Also, please call me immediately if you need or will accept additional information to support my
disputes. My cell phone is (___) ___-____ and my home phone is (___) ___-____. To further verify the
information in this letter, you can also contact the Clerk of the bankruptcy court at (___) ___-____.
Enclosures (INCLUDE ALL PRIOR DISPUTES AND ANYTHING ELSE THAT HELPS. INCLUDE ALL OF
YOUR BANKRUPTCY PAPERS. ALSO INCLUDE COPIES OF DRIVER@S LICENSE AND UTILITY BILL.)
cc: [CREDITORS WHO ARE STILL SHOWING WITHOUT DISCHARGE STATUS]
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[EE-44]

CHAPTER EE
Protecting a Consumers Right to Accuracy and Completeness under
THE FEDERAL FAIR CREDIT REPORTING ACT
Leonard A. Bennett
Consumer Litigation Associates, P.C.
12515 Warwick Boulevard
Newport News, Virginia 23606
(757) 930-3660
lenbennett@cox.net 1
I. UNDERSTANDING THE CREDIT REPORTING SYSTEM.
A. Historical Overview and Background.
Congress enacted the FCRA in 1970 as Title VI of the Consumer Credit Protection Act, 15 U.S.C.
1601-1693r (CCPA), the plenary regulation of the national consumer credit industry. Consumer
credit has expanded nearly three hundred fold in the last sixty years and is now one of the largest
sectors of the national economy. Growing from six billion dollars at the end of World War II,
outstanding consumer credit debt rose to 116 billion dollars in 1970 when Congress enacted the
FCRA and by 1993 reached over 700 billion dollars. S. Rep. 103-209, 103d Cong., 1st Sess. 2-3
(1993). The Federal Reserve Board now reports that this figure has reached 1.759 trillion dollars.
To support this phenomenal level of activity, the consumer reporting industry in 1993 maintained
450 million credit files on more than 110 million individuals and processed almost 2 billion pieces
of data per month. Id., at 3. Most recently, statistics from just one of the three major CRAs show
that it maintains reports on 190 million Americans, virtually the entire adult population of the
country, and processes between 1.4 and 1.6 billion items of information each month. Trans Union
Corp. v. Federal Trade Commission, 245 F.3d 809, 812 (D.C. Cir. 2001). In view of the
demonstrated potential for error in operating this informational maze, Congress adopted the FCRA
with the explicit recognition that the health of the consumer banking system is Adependent upon fair
and accurate credit reporting@ and that A[i]naccurate credit reports directly impair the efficiency of
the banking system.@ 15 U.S.C. 1681(a)(1).
A recurring theme at the heart of the CCPA is that the dissemination of accurate credit information is
1

This outline was prepared with the contribution of a friend and FCRA colleague,
DAVID A. SZWAK, Esq., Bodenheimer, Jones, Szwak & Winchell, 401 Market Street, Ste. 240,
Shreveport, Louisiana 71101, 318-424-1400, WWW.BJSWLAW.COM.

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essential to maintain the vitality of the credit granting system for the benefit of creditors and
consumers alike. Just as Congress enacted the FCRA with the express purpose that credit grantors
be in the best position to make reliable credit granting decisions, the Truth in Lending Act, 15
U.S.C. 1601-1667e, Title I of the CCPA (TILA), establishes the corresponding principle through
its disclosure requirements that consumers are best served through their own Ainformed use of
credit. 15 U.S.C. 1601(a). In addition to the FCRA and TILA, Congress has included a further
self-help checking mechanism within the CCPA as Title VII, the Equal Credit Opportunity Act, 15
U.S.C. 1691-1691f (ECOA), providing yet another information sharing standard through its core
requirement that creditors disclose, and consumers receive, the specific reasons for any adverse
action taken, such as credit denial. 15 U.S.C. 1691d.
The Supreme Court succinctly stated this guiding principle of this Congressional philosophy thirty
years ago in its initial and seminal teaching under the CCPA: A[B]lind economic activity is
inconsistent with the efficient functioning of a free economic system such as ours.@ Mourning v.
Family Publication Service, Inc., 411 U.S. 356, 364 (1973). The 1996 amendments to the FCRA
were adopted with the recognition that credit decisions made in ignorance or without the benefit of
accurate information, whether made by credit grantors or consumers, undermine the vitality of the
consumer economy. Together with several other statutes, the FCRA is part of a larger package of
laws entitled the federal Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).
Inclusion of the FCRA Awas prompted by >congressional concern over abuses in the credit
reporting industry. See Philbin v. Trans Union Corporation, 101 F.3d 957, 962 (3rd Cir. 1996) (citing
Guimond v. Trans Union Credit Information Company, 45 F.3d 1329, 1333 (9th Cir. 1995)). As
noted by the Sixth Circuit Court of Appeals:
[W]ith the trend toward computerization of billings and the establishment of all sorts
of computerized data banks, the individual is in great danger of having his life and
character reduced to impersonal blips and key-punch holes in a stolid and
unthinking machine which can literally ruin his reputation without cause, and make
him unemployable or uninsurable, as well as deny him the opportunity to obtain a
mortgage to buy a home. We are not nearly as much concerned over the possible
mistaken turn-down of a consumer for a luxury item as we are over the possible
destruction of his good name without his knowledge and without reason. * * * [A]s
Shakespeare said, the loss of one=s good name is beyond price and makes one poor
indeed. Bryant v. TRW, Inc., 689 F.2d 72, 79 (6th Cir. 1982).
Unfortunately, despite the intent and best efforts of Congress in adopting the FCRA, accurate
information was not being consistently provided by the consumer reporting system to its credit
granting clientele. In deliberations in 1996 that culminated with the enactment of FCRA
amendments, Congress was presented with the staggering statistic that nearly half of all consumer
reports (48%) maintained by the three major CRAs contain inaccurate information. S. Rep. 103209, supra, at 3. By 1996, Congress was poised to reform and strengthen the credit reporting system
that it had left essentially untouched for twenty-five years. Id. at 2. The FCRA was amended in
1996, with an effective date of 1997. The primary purpose of these amendments was to impose
more substantial requirements on the furnishers of credit information.
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Recently, the FCRA has again been amended by Fair and Accurate Credit Transactions
Act of 2003 (FACTA) (Public Law 108-159). While there were very few meaningful improvements
in the statute and the amendments have not yet been codified, the changes will need to be addressed
in this discussion.
B. The Credit Industry.
1. Consumer Reporting Agencies.
The credit reporting industry is big business. According to the Consumer Data Industry Association
(CDIA), the trade organization for credit reporting agencies, there are over 500 agencies, mortgage
reporting companies, check services companies, tenant screening companies and employment
investigation services. The three national bureaus, Equifax, TransUnion and Experian sell hundreds
of millions of credit reports each year.
While some smaller and specialized reporting agencies do exist, there are three national and primary
agencies: Equifax, Experian and TransUnion. Other CRAs may be Aresellers@ who use the files of
the Big 3 to create a finished report. This is most often seen with the creation of mortgage reports.
These reports may also be sold through local resellers who have been Aaffiliates@ of one of the
national bureaus. Alternatively, the report may come from an Aaffiliate@ who technically owns the
data maintained by and at the national CRA in a particular state or metropolitan area. It is believed
that there are no longer any such relationships in Virginia, though they continue to exist in certain
other regions of the country. Finally, some of the CRAs are specialized and must create and
maintain their own consumer files. For example, Choicepoint, a former Equifax subsidiary, sells
claims history and driving record reports in the insurance industry. Certegy, another former Equifax
subsidiary, as well as Telecheck and SCAN create check approval reports. And a number of small
companies in Virginia have begun to distribute tenant history reports.
Nevertheless, the overwhelming majority of consumer reports are created and distributed by the
three national CRAs. In this part of the country, the most dominant CRA is Equifax. The publicly
traded company is Equifax, Inc. However, in litigation, the CRA has always taken the position that
the creation, maintenance and distribution of credit reports in the United States is accomplished
through its subsidiary, EQUIFAX INFORMATION SERVICES, LLC. The company is based in
Atlanta, though it outsources much or most of its work, including dispute handling, investigations
and mailing. It is defended by the Atlanta law firm of Kilpatrick Stockton and uses the same very
small group of attorneys to defend FCRA cases across the country.
A second national CRA is TRANSUNION, L.L.C. TransUnion is privately held and is based in
Chicago and Pennsylvania. It also has a substantial facility in California. TransUnion is defended
by several firms across the country. The particular defense firm will be determined by State. In
Virginia, TransUnion uses three attorneys from the Philadelphia law firm of Satzberg, Trichon,
Kogan & Wertheimer. While this is not true in Virginia, elsewhere in the country TransUnion has
forced a number of FCRA cases to trial and as a result has suffered several million dollar verdicts.
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The third national CRA is EXPERIAN INFORMATION SOLUTIONS, INC. Experian is based in
Texas, though it has a substantial facility in California. It is almost always defended by the national
law firm of Jones Day. While Experian cases will most likely be tried by a particular Jones Day
attorney from California, FCRA cases against this CRA are usually handled by a single associate at
the regional Jones Day office until ready for trial. Experians presence is much more dominant on
the West Coast.
The CRAs are the primary players in the industry and greatly influence the standards and practices
followed by both furnishers and users. The primary section of the FCRA which are litigated against
the CRAs are 15 U.S.C. 1681b (permissible purposes for providing a consumer report),
1681e(b) (standards for accuracy and completeness if consumer reports) and 1681i (consumer
dispute investigation procedures for the CRAs).
2. Furnishers.
The second important actor in the credit industry are the furnishers. Furnishers of information to
credit bureaus such as banks, credit unions, finance companies, mortgage companies, and other
financial institutions holding automobile loans will generally report information regarding their
accounts to credit bureaus on a monthly basis.
In addition to these Aaccount@ or Atradeline@ records, including data from collection agencies, the
CRAs also gather records directly from the courthouses across the country. Each CRA uses a thirdparty subcontractor to gather public records (bankruptcies, judgments and tax liens) either manually,
by sending someone to the clerks offices with a laptop computer, or by automated means by
downloading PACER or bankruptcy court electronic filings. If a consumer discovers a judgment
in his credit report, it is not the judgment creditor who reported it. Instead, it was obtained and
placed in the consumers file solely by the bureau. Accordingly, any efforts to correct or update a
judgment record should always be made directly to the CRA. However, this is different than the
status of individual tradelines. Often if a consumer files bankruptcy, his report will show a
bankruptcy filing in the public records section of the credit report. In addition, it should show the
correct status of each individual tradeline or creditor account. If an account was discharged in
bankruptcy, the CRAs will rely upon the furnisher to update the account tradeline even though they
have already independently added the bankruptcy to the public records.
Furnisher liabilities and responsibilities under the FCRA are substantial and are independent of those
of the CRAs. The section of the FCRA which is litigated against furnishers is 15 U.S.C. 1681s2(b).
3. Users.
The third actors in the credit industry are the persons and entities who obtain and use consumer
reports. There are a wide variety of purposes for which a person may obtain and use such a report.
These are contained in 15 U.S.C. 1681b. If the user renders an adverse action against the
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consumer, they are required to provide an appropriate notice to the consumer. 15 U.S.C. 1681m.
CRAs almost always provide consumer reports under a blanket certification by the user. The FTC
regulations permit a CRA to accept a onetime only written statement by the user to obtain and use
the CRAs consumer reports only for a permissible purpose. Accordingly, the user will not disclose
a specific purpose to the CRA for each credit pull.
Each publication of a consumers credit file is to be recorded in the inquiry section of the consumer
report. These inquiries are of two types. Hard inquiries are those which may impact a consumers
credit score. They are generally inquiries generated upon a creditors consideration of a consumers
application for credit or insurance. However, often these will include skip-trace inquiries by debt
collectors seeking to obtain the location of a consumer. This later type of inquiry is rarely for the
purpose stated, and is often placed solely for the illegal purpose of alerting the consumer and his
creditors that a debt collector is pursuing a claim.
The second type of credit pull is a soft inquiry. These are not scored. They include all disclosures of
the credit file directly to the consumer. They also include account review and promotional inquiries.
The former are permitted for creditors with whom the consumer maintains open-ended credit. The
later pulls are only partial and disclose to the consumer that the CRA has marketed and published his
name and address to a potential creditor.
4. Fair Isaac Corporation.
Any discussion of the credit industry has to include Fair Isaac. This company creates various credit
scoring models. It sells these either directly to creditors, or more often to the CRAs. The national
CRAs work hand in hand with Fair Isaac to develop and market scoring models. There are many
different models, depending upon the purpose to which it will be put. For example, mortgage
lenders and auto lenders will use different scores.
In addition, each CRA sells its own version of a Fair Isaac score. Equifax has named its Beacon.
TransUnion named its model Empirica. Experian retained the Fair Isaac name FICO. Credit scores
may vary greatly between bureaus. This is partially because of the differences between the
information retained by each CRA in its proprietary files. Not only do the CRAs produce for their
subscribers a credit score, but they also provide a list of factors which allegedly impacted the score.
These factors are adverse action codes and are the items typically listed by creditors when they
provide their denial letters. Very often, a creditor may not even know why they denied a credit
application, other than because of a low credit score. The statement of reasons given is generated
automatically by the CRAs.
Very little is known about the Fair Isaac black box although this may change as it faces a likely wave
of litigation brought on by the inaccuracy of its scoring. http://www.consumerfed.org
/121702_creditscorereport.html.
C. Disputing Inaccuracies in a Consumer Report.
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1. The Dispute System.

When a consumer discovers an inaccuracy within his or her credit report, they may
initiate a dispute in one of two ways - by contacting the furnisher directly or by contacting the
credit reporting agency. If the consumer contacts the furnisher directly, he does so at his own
peril. Despite the 1996 amendments and FACTA, the FCRA has left the furnisher largely immune
from effective oversight. Without a private cause of action, the broad and admirable accuracy
standards of Section 1681s-2(a) are merely aspirational. The only furnisher liability under the FCRA
is under Section 1681s-2(b) and this is only triggered through a contact from the credit reporting
agencies. No FCRA case has survived even the earliest stages of litigation without the consumer
establishing that the dispute was initiated through the bureaus.
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 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
consumers 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 drivers 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 Unions responsible employee explained the
CRAs investigation procedure.
Q . . . [T]he dispute investigator looks at the consumer's written dispute and then reduces that to a
code that gets transmitted to the furnisher?

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A. Yes.
Q. Does the furnisher ever see the consumer's written dispute?
A. No.
...
Q. Are there any instances in which the dispute investigator would call the consumer to find out
more about the dispute?
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. However, while the CRAs are the
cause of many of the FCRA problems, they are not solely responsible. Despite the 1996
Amendments, the furnishers continue to neglect or ignore their role in the credit reporting system. It
is not an unfair characterization to describe the investigation process as a shell game wherein the
CRAs and furnishers have worked in concert to protect one another from their already minimal
liabilities under the FCRA. In nearly every case against a credit reporting agency in which I have
been involved, the bureau has asserted as its defense the fact that the furnisher verified and rereported the inaccurate information. Contrary to the plain language of the FCRA and the unanimous
judgment of the federal judiciary, the CRAs do not believe they have any duty under the FCRA to
independently evaluate the documents and disputes before them. Rather, they continue to assert the
position that their only duty in conducting an investigation is to confirm that the furnisher wishes to
maintain the disputed item. The CRAs continue to blindly mirror whatever the furnishers provide.
In its deposition, TransUnion brazenly admitted this fact on the record:
Q. What happens when a dispute investigator gets some type of documentation, other than the
consumer's dispute, that comes from a third party, but doesn't come from the furnisher?
A. We wouldn't be able to act on any instructions or anything in there. They're not the furnisher of
the information.

Trans Unions policy is identical to that of Equifax and Experian. The CRAs simply parrot whatever
they receive from the furnisher.

2. Practical Considerations.
a. Your dispute will not receive personal handling.

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Many attorneys assume that a strongly worded or well-documented letter will scare a CRA or
creditor into removing erroneous information from a credit report. This is simply false. The
correspondence will not be handled by a legal department or treated anymore meaningfully than if
your client sent a short postcard into the bureau.
b. What the furnisher says, goes.
My office handles more FCRA cases than anyone in the Mid-Atlantic. Despite this fact, I have no
secret or easy solution for a consumer who wants to remove or correct inaccuracies in his or her
credit report. The CRAs ignore my letters as they do all others. Even upon receipt of a detailed
letter and supporting documents, the CRAs will ignore the consumers dispute if it conflicts with the
information provided by their subscribing furnisher. This is nearly always true even if the consumer
provides a document from that creditor. (The loan exception is for bankruptcy disputes. In these
cases, the CRA employees or subcontractors will act upon pleadings from the bankruptcy case
without contacting the furnisher).
c. You are creating a trial exhibit.
Regrettably, most consumer disputes will fail. The frustration of identity theft victims, for example,
grows out of the futility of this process. Accordingly, you have to accept the fact that your dispute
letter may be used as an exhibit at trial when an FCRA action is brought against the CRA or
furnisher. This fact has several important implications. First, if you intend to represent the
consumer in litigations, you need to avoid making yourself or anyone else in your office a witness.
Some FCRA attorneys prefer to draft and execute dispute letters for their clients. Others avoid doing
so at all cost. This difference is less important than considerations about mailing. If you decide to
draft the dispute letter, make certain it is your client who mails it. By doing so, you obtain the
mailing presumption of receipt. You may also wish to have your client send the dispute by certified
mail.
Be aware of the fact that a jury may someday see the dispute letter you provide your client or send to
the CRA. The more detailed the dispute, the more egregious the CRA will look for turning the
substance of the dispute into an overly simplified two-digit code.
d. The CRAs will not correspond with you.
Even if the dispute is signed by you, the CRAs will attempt to avoid corresponding with your office.
Equifax may send your client a letter explaining why they are wasting time and money by hiring an
attorney. All three bureaus will refuse to send the investigation results to you or to provide you a
copy of the updated consumer disclosure/report. Instead, they will send these directly to your client.
The only way to avoid this is to have your client execute a power of attorney, or to sign with notary
signature an instruction to send the report and results to you.
e. Always make a dispute in writing.

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The CRAs will provide a form which they encourage consumers to use for making disputes. These
forms attempt to pigeon hole the dispute into one of several general types and do not facilitate
detailed disputes by the consumer. Telephone disputes do not create an adequate record in the event
the case does go to trial.
f. The CRAs are scared of the terms fraud and identity theft.
Perhaps the only way to obtain greater scrutiny for a consumer dispute is to describe it as identity
theft or a fraud dispute. Each CRA has a different procedure for handling these disputes.
3. The Dispute MUST be Made to the CRA.
Perhaps the biggest problem I see with cases that arrive in my office is the failure of the consumer or
co-counsel to have written the CRAs. In this regard, the FCRA may seem counter-intuitive. A
consumers first reaction upon learning of a credit report inaccuracy is to go straight to the source the creditor/furnisher. However, under the FCRA, this contact does not create a cause of action.
The relevant section of the FCRA, 15 U.S.C. 1681s-2(b) only requires the furnisher to investigate
and act when it receives a consumer=s dispute made through the CRA.
II. LITIGATING UNDER THE FCRA.
The FCRA is a difficult statute under which to litigate. Despite the fact that it has been around since
1971, there is a relative dearth of case law on the FCRA. Nearly every new opinion will make law
in some venue or in some manner. It is critical to the success of your FCRA practice, as well as the
protection of consumers throughout Virginia, and possibly the country, that you think through and
thoroughly research the law in a case before proceeding. Some of the worst opinions in this area
have come from pro se litigants and in cases with part-time consumer attorneys.
There are several sources of assistance available to you. First, of course is the statute, and its
available case law. The Federal Trade Commission has also issued an Official Staff Commentary
and in some areas of the law, Informal Letters. The staff commentary is available as 16 C.F.R. Part
600. The informal letters are available on the FTC website. www.ftc.gov.
Within this next year, it is also likely that the FTC and the Federal Reserve Board will issue a
number of regulations required to implement the 2003 FACTA amendments.
I also would strongly suggest that anyone who intends to litigate in this area (on either side) obtain a
copy of the most National Consumer Law Centers publication Fair Credit Reporting.
www.nclc.org. For those attorneys who are able to affirm that they represent no interests adverse to
consumers, they should consider joining the National Association of Consumer Advocates to benefit
from a number of other available resources, including but not limited to attendance at the Annual
NACA FCRA Conference. www.naca.net.
A. The Consumer Report.

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Before beginning any analysis of whether you can establish a viable FCRA cause of action, you need
to know whether or not you are dealing with a consumer report.
Each month, billions of records on consumer accounts are forwarded by credit card companies,
mortgage lenders, debt collectors and other furnishers to the three national bureaus. Most larger
creditors have subscriber contracts with all three bureaus. The data is forwarded in monthly dumps,
either by magnetic tape or, more often than not for larger creditors, by direct electronic transmission
to the CRAs. The data is translated by each creditor from its internal account format, into either
METRO or METRO 2. Metro and Metro 2 are the formats created by the CRAs, through the CDIA
to receive account data from their customers. It consists of a series of numbers and letters, one line
per account, with each space in the line designated for a different purpose or data field. (e.g. name,
address, account number, balance, etc.). The Metro 2 format was recently created and is the
preferred method of reporting. However, the CRAs each permit their existing customers to use
either Metro or Metro 2. Metro 2 added a number of features which allow more specific and
accurate reporting by consumer, rather than merely by account.
When the subscriber data is received by the CRAs, it is not placed into a consumer report. Instead,
eeach CRA uses a different process and algorithm for organizing and categorizing the data it
receives. None of the CRAs maintain or create an actual credit report on a consumer until one is
requested by a creditor. Each credit report is custom generated. At monthly intervals, the CRAs
generate and take a Asnapshot of each credit file. Each CRA claims it cannot retrieve and does not
save a copy of any specific report it generates for a creditor.
Under the FCRA, there is in fact no such thing known as a credit report. Instead, there may be a
consumer report or in the alternative, a consumer disclosure. The term consumer report is defined
at 15 U.S. C. 1681a (d):
(d) Consumer report.
(1) In general. The term consumer report means any written, oral, or other
communication of any information by a consumer reporting agency bearing on a
consumers credit worthiness, credit standing, credit capacity, character, general
reputation, personal characteristics, or mode of living which is used or expected to be
used or collected in whole or in part for the purpose of serving as a factor in establishing
the consumer=s eligibility for:
(A) credit or insurance to be used primarily for personal, family, or
household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 1681b of this title.
This definition is important because it contemplates that the report would be used by a third party.
The report that consumers may obtain on their own, by mail, the internet or otherwise, will not be a
consumer report. This distinction matters more when considering the basis for a CRAs liability
under the statute. The actual consumer reports generated will often vary greatly from the consumer
disclosures provided to consumers by the CRAs. This is because the CRAs use a different and
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tighter set of parameters to generate the disclosure than they do with the reports. It is important that
you attempt to discover the actual consumer report provided to the creditor to compare it to the
disclosure the CRA provided to the consumer. This is especially true for identity theft cases or cases
involving a claim that the CRA has mixed file accounts from one consumer into the credit file of
another.
As easy as it is for an identity thiefs credit files to be combined with that of an innocent
consumer, it is even more likely to happen to persons of similar name and address or social
security number. The credit reporting industry is now almost entirely automated. Its file
searches do not require full identifying information - either to obtain a credit report or to furnish
information to the bureau. As a result, I have been asked to help Sandra K. Brown, who had
perfect credit, when Equifax could not keep the files of Sandra M. Brown from merging. And
Mary E. Jones and Mary W. Jones, who because of their similar names and addresses had both of
their identities combined by Trans Union. Or Teresa B. Davis, who lived on the same street as
had Teresa G. Davis several years prior and had much better credit before Equifax merged the
two files.
The vast majority of consumer reports provided by the CRAs are automated credit scores. Outside
car loans and mortgage applications, most creditors do not actually review the details within a credit
report. Instead, they rely on a credit score or other automated systems provided by the CRAs or
created internally.
The FCRA does not apply to a report issued upon a request for commercial, business or
professional credit but only to consumer credit matters. Zeller v. Samia, 758 F.Supp. 775 (U.S.D.C.
Mass. 1991); Hussain v. Carteret Sav. Bank, F.A., 704 F.Supp. 567 (U.S.D.C. N.J. 1989); Williams
v. Equifax Credit Information Services, 892 F.Supp. 951 (U.S.D.C. E.D. Mich. 1995). Reports
issued for commercial, business or professional purposes are outside the scope of FCRA. Zeller v.
Samia, 758 F.Supp. 775 (U.S.D.C. Mass. 1991).
However, this does not mean that inaccurate credit information related to a commercial or business
transaction may be reported in a consumer report. The key question is how is the credit report at
issue to be used. If the particular report is to be used for the consideration of extending personal
credit, it is a consumer report even if some of the accounts listed in the report are business accounts.
A "consumer report" is virtually any information communicated by a consumer reporting agency for
purposes set forth in the FCRA. Hoke v. Retail Credit Corp., 521 F.2d 1079 (4th Cir. 1975).
EXAMPLES: CHECK APPROVAL AND CHECK-CASHING HISTORY COMPANIES:
Report from check approval company is a consumer report. 15 U.S.C. 1681a(d); Estiverne v.
Sak's Fifth Ave., 9 F.3d 1171 (5th Cir. 1993) [La.]. Report concerning an unpaid check or
unpayable check is a "consumer report." Greenway v. Information Dynamics, Ltd., 524 F.2d 1145
(C.A. Ariz. 1975); 15 U.S.C. 1681a(d). A check-cashing history report is a "consumer report".
Greenway v. Information Dynamics, Ltd., 524 F.2d 1145 (C.A. Ariz. 1975).

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RENTAL PAYMENT HISTORY REPORT BY LANDLORD SERVICE:

Report by landlord service to landlord detailing rental payment history of Plaintiff was a
"consumer report". Cotto v. Jenney, 721 F.Supp. 5 (U.S.D.C. Mass. 1989). In Cisneros v. U.S.
Registry, Inc., 46 Cal.Rptr.2d 233, 39 C.A.4th 548 (Ca. App. 2d Dist. 1995), the court held that
reports issued by a company in the business of gathering information regarding residential tenants
and selling information to landlords for the use of screening tenants were consumer reports under the
FCRA and the company providing such information was a "consumer reporting agency."
LICENSING-RELATED REPORTS: Information obtained in investigation by licensing
committee is a "consumer report". Hoke v. Retail Credit Co., 521 F.2d 1079 (4th Cir. 1975). Credit
bureau's report to State Board of Medical Examiners to aid in assessing physician applicant's
qualifications for license was a "consumer report" for "employment purposes." Hoke v. Retail
Credit Corp., 521 F.2d 1079 (4th Cir. 1975).
MEDICAL INFORMATION: Information obtained about consumer's health from non-medical
persons, like neighbors, does not constitute "medical information" as found in 1681a. Retail
Credit Co., v. Dade County, 393 F.Supp. 577 (U.S.D.C. Fla.).
INSURANCE CLAIMS REPORTS: Insurance claim reports are not "consumer reports" unless
used to deny claimant benefits and then fact that report was made, along with copy of it, must be
disclosed to claimant. Kiblen v. Pickle, 653 P.2d 1338 (Wash. App. 1982). An insurance claims
report, as opposed to a general credit report, is not a "consumer report" under FCRA. In essence, in
an insurance claims report, an insurer asks a consumer reporting agency to prepare a report relating
to a specific insurance claim on a pre-existing policy. St. Paul Guardian Ins. Co. v. Johnson, 884
F.2d 881 (5th Cir. 1989); Houghton v. New Jersey Mfrs. Ins. Co., 795 F.2d 1144 (3d Cir. 1986);
Cochran v. Metropolitan Life Ins. Co., 472 F.Supp. 827 (U.S.D.C. N.D. Ga. 1979).
Investigative report on insured making claim against insurer is a "consumer report". Beresh v.
Retail Credit Co., 358 F.Supp. 260 (U.S.D.C. Cal.). In Hall v. Harleysville Insurance Co., 896
F.Supp. 478 [U.S.D.C. E.D. Pa. 1995], the court found that the AFCRA covers actual credit reports
because those reports were originally collected for the purposes of determining eligibility for
insurance, credit or employment, even if they were not used for those purposes in these particular
instances. [multiple citations omitted.]. Id. at 482. Further, the FTC has ruled that Aan insurance
claims report would be a consumer report [or information from a consumer report] were used to
prepare it. See 16 CFR Pt. 600, App. Sec.603[5][C]. Insurance companies are limited to accessing
consumer reports solely for underwriting purposes allowed under 1681b[3][C]. Insurers cannot
obtain a consumer report for the purpose of evaluating a claim [to ascertain its validity or otherwise
determine what action should be taken]. 16 CFR Pt. 600, App. Sec.604[3][C][2].
NOT MARTINDALE-HUBBELL - LEGAL RATING DIRECTORY:
Legal directory containing ratings of legal ability was not "consumer report" and publisher thus was
not "consumer reporting agency" under Fair Credit Reporting Act since the rating of legal ability
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did not purport to concern any aspect of credit, general reputation, personal characteristics, or
mode of living of those rated. Bergen v. Martindale-Hubbell, Inc., 337 S.E.2d 770, 176 Ga.App.
745 (1985), appealed dismissed, cert. denied 107 S.Ct. 45, 479 U.S. 803, 93 L.Ed.2d 7.
NOT A REPORT PREPARED BY PERSON HAVING TRANSACTION OR EXPERIENCE
WITH CONSUMER: Information provided by bank to credit bureau, based on bank's experience
with defrauder using consumer's identity, was not a "consumer report" under FCRA, though data
furnished by bank was not in fact that of consumer, as bank believed consumer was its customer and
liable for delinquent account. Alvarez Melendez v. Citibank, 705 F.Supp. 67 (U.S.D.C. Puerto Rico
1988).
NOT A REPORT FOR CHILD SUPPORT AND MEDICAL EXPENSES: Report prepared in
connection with action for child support and medical expenses is not a "consumer report".
Gardner v. Investigators, Inc., 413 F.Supp. 780 (U.S.D.C. Fla.).
NOT CREDIT CARD REJECTION/SEIZURE NOTICE: Where creditor communicates to
vendor that credit card should be rejected or seized, such is not a "consumer report", but is a
communication between the creditor and its agent and need not meet the terms of 15 U.S.C.
1681a(f). Wood v. Holiday Inns, Inc., 508 F.2d 167 (5th Cir.)
NOT SOCIAL SERVICE INSTITUTION OR ADOPTION AGENCY REPORTS: Social
Service Institution reports are not "consumer reports". Adoption agency's investigative reports,
compiled by the adoption agency, are not "consumer reports". Porter v. Talbot Perkins Children's
Services, 355 F.Supp. 174 (U.S.D.C. N.Y. 1973).
NOT POLYGRAPH TESTS: The results of a polygraph test is not a "consumer report". Peller v.
Retail Credit Co., 359 F.Supp. 1235 (U.S.D.C. Ga. 1973), affirmed, 505 F.2d 733.
NOT IF IN COMPLIANCE WITH SUBPOENA FOR PRODUCTION OF FINANCIAL
RECORDS: In Schoka v. General Motors Acc. Corp., 1 F.3d 1247, 1993 WL 290143 (9th Cir.
1993), a pro se plaintiff sued a car dealership for releasing auto sales documents, including his credit
records obtained in the course of the sale, to the District Attorney=s Office in response to a valid
subpoena for records. Plaintiff alleged the car dealer violated the FCRA. Summary judgment was
granted in defendant=s favor and the court of appeals affirmed.
B. Litigating Inaccuracies in a Consumer Report.
If a consumer has been damaged by inaccurate information in his consumer report, there are two
potential defendants: the CRAs and the Furnishers. Each is often partially responsible.
1. Claims against the Consumer Reporting Agencies.
a. 15 U.S.C. 1681e(b)

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There are two types of claims which a consumer may bring against the Reporting Agencies under the
FCRA. The first of these is under 15 U.S.C. 1681e(b). This subsection states:
(b) Accuracy of report. Whenever a consumer reporting agency prepares a consumer
report it shall follow reasonable procedures to assure maximum possible accuracy of
the information concerning the individual about whom the report relates.
This claim alleges that the CRA has published a consumer report to a third party without reasonable
procedures to assure maximum possible accuracy. Consumer advocates use the phrase maximum
possible accuracy, while the CRAs emphasize the term reasonable procedures.
The standard of accuracy for credit reports embodied in FCRA is objective measure that should be
interpreted in even-handed manner toward interests of consumers and creditors in fair and accurate
reporting. Cahlin v. GMAC, 936 F.2d 1151 (11th Cir. 1991).
To establish a violation under 1681e(b), a consumer must present evidence tending to show that
a credit reporting agency prepared a report containing inaccurate information. Dalton v. Capital
Associated Industries, Inc., 257 F.3d 409 (4th Cir. 2001), quoting Guimond, 45 F.3d at 1333. Citing
Washington v. CSC Credit Servs. Inc., 199 F.3d 263, 267 n.3 (5th Cir. 2000); Spence v. TRW, Inc. 92
F.3d 380, 382 (6th Circ. 1996); Henson v. CSC Credit Servs., 29 F.2d 37, 39 (7th Cir. 1994);
Koropoulos v. The Credit Bureau, Inc., 734 F.2d 37 (D.C. Cir. 1984).
Technical accuracy is not the standard, a consumer report must be accurate to the maximum
possible extent. In essence, the trier of fact must weigh potential that information will create
misleading impression against availability of more accurate information and burden of providing
such information. Alexander v. Moore and Associates, Inc., 553 F.Supp. 948 (U.S.D.C. Haw. 1982);
Koropoulos v. The Credit Bureau, Inc., 734 F.2d 37 (D.C. Cir. 1984) Cisneros v. U.S. Registry, Inc.,
46 Cal.Rptr.2d 233, 39 C.A.4th 548 (Ca. App. 2d Dist. 1995).
A consumer report is inaccurate when it is patently incorrect or when it is misleading in such a
way and to such an extent that it can be expected to have an adverse effect. Dalton, 257 F.3d at
415, quoting Sepulvado v. CSC Credit Servs., 158 F.3d 890, 895 (5th Cir. 1998).
The seminal case on this issue in the Fourth Circuit is Dalton. In this case, the Fourth Circuit
considered a claim by an employee against the consumer reporting agency under 1681e(b). The
CRA had conducted a background check for a potential employer. The CRA discovered from
Colorado records that the consumer had been convicted of third degree assault. When the CRA
employee telephoned the Colorado court clerks office, he was told that this was a Felony. This was
incorrect. It was in fact a misdemeanor. The Court of Appeals denied the CRA summary judgment
and sent the case back on remand for trial.
The Fourth Circuit held that the issue of whether the agency failed to follow reasonable
procedures will be a jury question in the overwhelming majority of cases. Dalton, 257 F.3d at
416, quoting Guimond, 45 F.3d at 1333. In the Fourth Circuit, the burden of proving a lack of
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reasonable procedures remains on the consumer. Dalton, 257 F.3d at 415.

A critical issue in establishing a claim against the CRA under 1681e(b) is whether or not the CRA
had reason to doubt or mistrust the source of its information. Given the ruling in Dalton, this may
not be as relevant in the Fourth Circuit. However, a consumers claim under this section will be
stronger if the plaintiff can prove that the CRA had notice of the defect in its procedures. Crabill v.
TransUnion, L.L.C. 259 F.3d 662, 663 (7th Cir. 2001).

The distinction between a consumer report and a consumer disclosure, which was addressed above
is an important one in evaluating a case for a 1681e(b) claim. This section does not require
maximum possible accuracy in a consumers credit file. Instead, it holds this standard only
[w]henever a consumer reporting agency prepares a consumer report[.] Accordingly, an
inaccuracy within a consumer disclosure is not sufficient. The inaccuracy must have been published
to a third party user.
The typical FCRA case begins when the consumer discovers an account in his consumer report
which is not his or which has an inaccurate payment history. If the consumer were to sue the CRA
on these facts, and nothing further, then he will have a tough time establishing the unreasonableness
of the CRA=s procedures. What did the CRA do wrong? However, after the consumer makes a
dispute to the CRA and puts it on notice of the dispute, the consumer is in a better position to assert
a 1681e(b) claim if the CRA republishes the inaccuracy. Accordingly, most FCRA attorneys will
attempt to establish this maximum possible accuracy claim only after also disputing the
inaccuracy.
The exception to this rule is when the CRA has notice of the inaccuracy before the first report was
published. For example, a national FCRA expert witness, Evan Hendricks, has put the CRAs on
notice by mailing a letter to each CRA regarding the unreliability of the records maintained by
MBNA, and several other creditors. http://www.privacytimes.com/. Alternatively, certain
information in a credit file may be internally inconsistent. For example, when the CRA has the date
of birth of a consumer and that date would confirm that the consumer was not at the age of majority
at the time a debt was allegedly incurred, it should not publish the inaccurate account. And while
the CRAs gather bankruptcy records directly from the clerks offices or records, they have no
procedures in place to reconcile inconsistent reportings from their creditor subscribers. The CRAs
do not do anything to determine whether or not a reported account has been discharged even though
they have accessed the court files which would provide that information. These types of 1681e(b)
claims may be pursued prior to an investigation or dispute. All other such claims should only be
litigated in conjunction with a claim that the CRA failed to properly investigate a consumer dispute.
A controversial issue in some circuits is whether or not a consumer must prove a credit denial in
order to establish a claim under 1681e(b). Compare Cassella v. Equifax Credit Information
Servs., 56 F.3d 469 2d. Cir. 1995) with Guimond v. TransUnion, 45 F.3d 1329 (9th Cir. 1995).
However, the law in this regard is established within the Fourth Circuit. A consumer does not need
to prove that he or she suffered any credit denial as a result of the inaccuracy. Other damages, such
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as emotional and mental anguish are sufficient. Dalton, 257 F.3d at 418.
b. 15 U.S.C. 1681i
The second basis to available claim against a CRA is under 15 U.S.C. 1681i. This section of the
FCRA establishes a consumers rights during and after a dispute of a credit inaccuracy. The section
is titled, Procedure in case of disputed accuracy and it generally provides:
(1) Reinvestigation Required
(A) In general. Subject to subsection (f), if the completeness or accuracy of any
item of information contained in a consumer's file at a consumer reporting
agency is disputed by the consumer and the consumer notifies the agency
directly, or indirectly through a reseller, of such dispute, the agency shall,
free of charge, conduct a reasonable reinvestigation to determine whether
the disputed information is inaccurate and record the current status of the
disputed information, or delete the item from the file in accordance with
paragraph (5), before the end of the 30-day period beginning on the date on
which the agency receives the notice of the dispute from the consumer or
reseller.
The section has a number of requirements and should be considered in detail before diagnosing any
FCRA claim. Stripped to its essential requirements, 1681i provides:
The consumer must make the dispute directly to the CRA or its affiliate.
1681i(a)(1)(A). A dispute to a creditor/furnisher is insufficient.

15 U.S.C.

The CRA has 30 days to complete its investigation. This period may only be extended for a total
period of 45 days, and then only if the consumer sends additional information during the 30 day
period. 15 U.S.C. 1681i(a)(1)(B).
The CRA must conduct a reasonable investigation. 15 U.S.C. 1681i(a)(1)(A). This is one of
the critical issues to be litigated. The CRAs take the position that they are merely required to
forward the dispute to the furnisher and are permitted to report the disputed information if the
furnisher verifies it. This is plainly wrong. The FCRA requires the CRA to conduct an
independent investigation of the information rather than simply parroting back the information
provided by the creditor. Cushman v. TransUnion, L.L.C., 115 F.3d 120 (3rd Cir. 1997) (this case
was also cited favorably by the Fourth Circuit in Johnson v. MBNA, 357 F.3d 426 (4th Cir. 2004)).
This interpretation is also consistent with the requirements of 1681i(a)(4) which obligates the
consumer reporting agency to review and consider all relevant information submitted by the
consumer. A consumer reporting agency may not rely solely on its subscribers to tell the agency
whether to delete information from the consumer's report. In reinvestigation of the accuracy of
credit reports, the agency must bear some responsibility for evaluating the accuracy of the
information obtained from its subscribers. Stevenson v. TRW, Inc., 987 F.2d 288, 293 (5th Cir.
1993); Swoager v. Credit Bureau of Greater St. Petersburg, Fla., 608 F.Supp. 972, 976 (U.S.D.C.
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M.D. Fla. 1985); Schueller v. TRW, Inc., 892 F.2d 1046 (Table, Unpublished) (9th Cir. 1989);
McPhee v. Chilton Corp., 468 F.Supp. 494, 496 (U.S.D.C. Conn. 1978); Bryant v. TRW, 689 F.2d
72, 77 (6th Cir. 1982); Cahlin v. GMAC, 936 F.2d, at 1160 (11th Cir. 1991).
However, the FCRA does not impose strict, absolute or automatic liability on consumer
reporting agencies for damages upon reporting inaccurate information. Ladner v. Equifax Credit
Information Services, Inc., 828 F.Supp. 427 (U.S.D.C. S.D. Miss. 1993); Jones v. Credit Bureau of
Garden City, Inc., 703 F.Supp. 897 (U.S.D.C. Kan. 1988); Thompson v. San Antonio Retail
Merchants Association, 682 F.2d 509, 513 (5th Cir. 1982); Hussain v. Carteret Sav. Bank, F.A., 704
F.Supp. 567 (U.S.D.C. N.J. 1989); Learn v. Credit Bureau of Lancaster County, Inc., 664 F.Supp.,
962 (U.S.D.C. E.D. Pa. 1987), reversed on other grounds, 838 F.2d 461; Beard v. Goodyear Tire &
Rubber Co., 587 A.2d 195 (D.C. App. 1991); Cahlin v. GMAC, 936 F.2d 1151 (11th Cir. 1991);
Hauser v. Equifax, Inc., 602 F.2d 811 (C.A. Neb. 1979); Cahlin v. GMAC, 936 F.2d 1151 (11th Cir.
1991); Jones v. Credit Bureau of Garden City, Inc., 703 F.Supp. 897 (U.S.D.C. Kan. 1988). Mere
fact that credit report contains inaccuracies, of itself, does not create liability of consumer
reporting agency. Jones v. Credit Bureau of Garden City, Inc., 703 F.Supp. 897 (U.S.D.C. Kan.
1988); Hussain v. Carteret Sav. Bank, F.A., 704 F.Supp. 567 (U.S.D.C. N.J. 1989); Learn v. Credit
Bureau of Lancaster County, Inc., 664 F.Supp., 962 (U.S.D.C. E.D. Pa. 1987), reversed on other
grounds, 838 F.2d 461.
Within 5 business days of receiving the dispute, the CRA must forward it to the furnisher. 15
U.S.C. 1681i(a)(2).
The CRA must forward Aall relevant information@ which it receives from the consumer to the
furnisher. 15 U.S.C. 1681i(a)(2). This is a substantial problem with the reinvestigation system
currently followed by all three national CRAs. In depositions, each CRA has admitted that it
NEVER forwards the consumers dispute letter or accompanying documents to the furnishers.
Instead, it crams the consumers dispute into a two-digit code. For example, 01 not his/hers or 02
disputes payment history. The furnishers have been provided by the CRAs with similarly useless
response codes. Often the furnisher is unaware of the real nature of the dispute or of any
important documentation the consumer has provided the CRA.
There are two separate circumstances under which a CRA must delete the disputed information. The
first is when it finds that the information was in fact inaccurate. However, the CRA must also delete
the account or make the correction if the information cannot be verified. 15 U.S.C. 1681i(a)(5).
This section requires the CRAs do remove information it knows to be inaccurate (such as
information the furnisher confirms should be deleted) as well as information of which it may not be
certain. However, the CRAs do not make this distinction. Instead, any doubt will result in the
CRAs retention of the disputed information.
If any information is deleted from a consumer's file upon an investigation, the CRA may not reinsert
the information unless the person who furnishes the information certifies that the
information is complete and accurate. 15 U.S.C. 1681i(a)(5). This is rarely what happens.
Because the CRAs maintain account records by both specific subscriber and account numbers, many
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furnishers modify their account (sometimes innocently, sometimes not) or subscriber numbers to
accomplish reinsertion of the disputed information. The CRAs set flags within their systems to
prevent reinsertions of the exact same account and subscriber numbers, but they make no effort to
prevent this modified account reinsertion. As most deletions will actually occur only because
the furnisher fails to respond to the CRA within the 30 day period, the creditor never actually
corrects its own records. Accordingly, when it sends its next monthly dump, the account will get
re-reported if the CRA does not set its procedures to ensure otherwise.
2. Claims against Furnishers.
a. Background.
The FCRA was in part an attempt to ensure the accuracy of consumer credit reports. To this end, it
created a set of accuracy and investigation requirements for the CRAs and a private cause of action
by which consumers could enforce such rights. However, the FCRA as originally enacted carried
little leverage over the creditors and collectors who reported their account data to the bureaus.
These Afurnishers@ had little reason to monitor or improve the accuracy of the information they
were reporting. Despite the intent and best efforts of Congress in adopting the FCRA, accurate
information was not being consistently provided by the consumer reporting system to its credit
granting clientele. In the deliberations that culminated with enacting the 1996 amendments,
Congress was presented with the staggering statistic that nearly half of all consumer reports (48%)
maintained by the three major CRAs contain inaccurate information. S. Rep. 103-209, supra, at 3.
By 1996, Congress was poised to reform and strengthen the credit reporting system that it had left
essentially untouched for twenty-five years. Id. at 2.
Before 1996 furnishers of information to consumer reporting agencies were outside the scope of the
FCRA. Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1060 (9th Cir. 2002). Despite
the central role that these entities played as the primary source of the data which the CRAs collected
and disseminated, furnishers were essentially immune from federal oversight. The 1996
amendments eliminated that privileged status.
Before 1996 furnishers were under no federal duty to report accurate information to the CRAs, to
respond to or investigate a consumer's dispute, or to assist the CRAs in their duty to investigate the
completeness or accuracy of the information which the furnisher itself provided. Vasquez-Garcia v.
Trans Union de Puerto Rico, 222 F.Supp.2d 150, 154 (D.P.R. 2002). This omission was significant
and frustrating since the reporting agencies themselves were bound to maintain the accuracy of their
reports [ 1681e(b), which remains unaltered] and investigate a consumer=s dispute that the
information is incomplete or inaccurate. 15 U.S.C. 1681i (West 1982). Consistent with the
absence of furnisher obligations, the FCRA permitted consumers to file civil actions only against a
consumer reporting agency or user of information which violated the Act. 15 U.S.C. 1681n
and 1681o, historical and statutory notes; Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d at
1060.
In 1996 Congress amended the FCRA. Consumer Credit Reporting Reform Act of 1996, Title II,
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Subtitle D, Ch. 1, of the Omnibus Consolidated Appropriations Act for Fiscal Year 1997 (P.L. 104208) (Sept. 30, 1996). Among the changes made to the FCRA are two which are relevant here.
First, Congress enacted an entirely new section, codified in 1681s-2, imposing on furnishers of
information detailed and specific responsibilities, including those in subsection (b) which the jury
found the Bank violated here. Second, Congress expanded and revamped the consumer dispute
resolution process of 1681i, including enacting 1681i(a)(2), which compels the CRA to promptly
notify the furnisher of disputed information and triggers the furnisher=s corresponding duties under
1681s-2(b).
The Senate Report accompanying the legislation confirms this limited FCRA coverage before 1996
and the effect of the amendments on furnishers:
Currently, the FCRA contains no requirements applying to those entities which
furnish information to consumer reporting agencies. Section 413 imposes certain
obligations upon those furnishers of information to consumer reporting agencies.
The Committee believes that bringing furnishers of information under the provisions
of the FCRA is an essential step in ensuring the accuracy of consumer report
information.
S. Rep. 104-185, 104th Cong., 1st Sess. 49 (1995) (emphasis added).
Under the FCRA, the furnisher is the person who actually reports information to a credit reporting
agency. Usually the furnisher is a creditor. The responsibilities of furnishers are now detailed at 15
U.S.C. 1681s-2. This section was enacted as an amendment to the FCRA in 1996, and was
amended in 2003 by FACTA.
b. Liability under 15 U.S.C. 1681s-2(a).
After the 1996 amendments, under 15 U.S.C. 1681s-2(a), furnishers were under a legal obligation
to report only credit information which was complete and accurate. However, there was no private
cause of action for a furnishers violation of this provision. Accordingly, creditors made little or no
effort to comply. In 2003, Congress again amended this subsection. The statute incorporates
additional aspirations governing the accuracy of a furnishers reporting. Nevertheless, bowing to
substantial industry pressure, Congress again stripped this subsection of a private remedy.
Theoretically, if a consumer is harmed by a furnishers disregard of 1681s-2(a)s requirements, he
could submit a complaint to the FTC. In 2003, the FTC received over 214,905 identity theft
complaints. It received countless more FCRA complaints which were not categorized as ID Theft.
http://www.ftc.gov/opa/2004/01/top10.htm. As a result, the FTC is unable to consider or prosecute
individual violations of the statute.
Nevertheless, furnishers are subject to a very strict standard. 15 U.S.C. 1681s-2(a), as amended
states in relevant part:
(1) Prohibition
(A) Reporting information with actual knowledge of errors. A person shall not
furnish any information relating to a consumer to any consumer reporting
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agency if the person knows or has reasonable cause to believe that the
information is inaccurate.
This represents an enlargement of furnisher obligations under the FCRA. The standard for furnisher
accuracy was changed from knows or consciously avoids knowing to the higher standard of
knows or has reasonable cause to believe information is inaccurate. This standard is developed
further by 15 U.S.C. 1681s-2(a)(1)(B):
(B) Reporting information after notice and confirmation of errors. A person
shall not furnish information relating to a consumer to any consumer
reporting agency if
(i) the person has been notified by the consumer, at the address specified by
the person for such notices, that specific information is inaccurate; and
(ii) the information is, in fact, inaccurate.
For purposes of this subsection, the term reasonable cause to believe that the information is
inaccurate means having specific knowledge, other than solely allegations by the consumer, that
would cause a reasonable person to have substantial doubts about the accuracy of the information.
15 U.S.C. 1681s-2(a)(1)(D). Subsection 1681s-2(a) also requires a furnisher who has been
informed of a consumers dispute to report same to the CRAs. 15 U.S.C. 1681s-2(a)(3). In the
case of a consumer who has submitted a report of identity theft about an account, the furnisher is
now required to block such information and to have in place reasonable procedures to prevent its
refurnishing same to the CRAs. 15 U.S.C. 1681s-2(a)(6).
However, it is important to understand that hese and the several other requirements of 15 U.S.C.
1681s-2(a) may not be enforced directly by private cause of action. In 1996, together with
subsection (a) (and subsection (b) discussed later), Congress also enacted, 15 U.S.C. 1681s-2(c)
and (d). These subsections expressly exclude subsection (a) violations from the otherwise inclusive
FCRA remedy sections, 15 U.S.C. 1681(n) and 1681(o). Only the Federal Trade Commission
and the state government may enforce subsection (a) violations. There is no private cause of action
for a furnisher=s violation of 15 U.S.C. 1681s-2(a). The Plaintiff is without a legal remedy to
prosecute an FCRA claim under 15 U.S.C. 1681s-2(a). Congress extended this limitation in
FACTA.
c. Liability under 15 U.S.C. 1681s-2(b).
Fortunately for consumers, in the 1996 Amendments, Congress also enacted 15 U.S.C. 1681s-2(b).
Subsection (b) imposes certain duties upon the furnisher only upon its receipt of a notice of dispute
from the credit reporting agency. Essentially, subsection (b) gives the creditor a safe harbor against
private remedies if it properly investigates and responds to the consumers dispute through the credit
reporting agency. Unlike subsection (a), nowhere in the FCRA is a violation of subsection (b)
excluded from the private remedies of 15 U.S.C. 1681(n) and 1681(o). Congress was very
particular in its enactment of subsections (c) and (d) and included only subsection (a) in their
limitations.
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1. There is a Private Cause of Action under 15 U.S.C. 1681s-2(b).

Despite the clear limitation of 15 U.S.C. 1681s-2(c) and (d) to the provisions of subsection (a),
there was some initial controversy amongst the District Courts which considered early s-2(b)
claims. This controversy was born out of a strange and now long-discredited decision, Carney v.
Experian Information Solutions, 57 F.Supp.2d 496 (W.D. Tenn. 1999). Several cases initially cited
this opinion, without comment. It began to appear as if there was some basis for furnishers to
defend s-2(b) claims with the argument that no private cause of action was available. However, it is
the opinion of this author that any further citation of the Carney opinion would be in bad faith. The
case itself evidenced fundamental misunderstandings of the FCRA and actually misquoted the text
of the statute. Fortunately, for the sake of clarity if nothing else, the initial acceptance of this
decision has now been reversed and the case long since discredited.
The first Circuit to consider, analyze, and render a holding expressly upon 1681s-2(b), the Ninth,
did so in Nelson v. Chase Manhattan Mortgage, 282 F.3d 1057 (9th Cir. 2002). Nelson is a well
drafted opinion as it explains the development, legislative background and application of 15 U.S.C.
1681s-2 in some detail. In concluding that a private cause of action must exist under subsection
(b), the court concluded:
The purpose [of the 1996 amendment] to provide some private remedy
to injured consumers, coheres with what we see as a primary purpose for
the FCRA, to protect consumers against inaccurate and incomplete credit
reporting. The statute has been drawn with extreme care, reflecting the
tug of the competing interests of consumers, CRAs, furnishers of credit
information, and users of credit information. It is not for a court to
remake the balance struck by Congress, or to introduce limitations on an
express right of action where no limitation has been written by the
legislature. 282 F.3d at 1059.
The Nelson holding is consistent with the reasoning of nearly every court which has considered the
1996 amendments. After Nelson, the Fifth Circuit United States Courts of Appeal also accepted the
Nelson analysis. Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631, 639 (5th Cir. 2002)
(declining to decide the issue but noting that [n]othing precludes a private right of action for
violation of the investigation and reporting requirements of Section 1681s-2(b).; The Ninth Circuit
sustained its earlier holding. Sharon v. Nissan Motors Acceptance Corp., No. 99-1420, 2002 WL
1791518, (9th Cir. Aug. 5, 2002) (reversing trial courts dismissal of section 1681s-2(b) claim against
furnisher because [t]he FCRA [] imposes obligations on entities that report information to credit
reporting agencies (unpublished). And the Fourth Circuit has issued two opinions that resolved this
non-issue conclusively in that Circuit. The first case was Beattie v. Nations Credit Financial
Services, No. 02-1744, (4th Cir. 2003). In Beattie, the Court of Appeals granted rehearing and
issued an amended opinion for the sole purpose of removing a citation to Carney. The Fourth Circuit
had published an opinion on May 27, 2003, which stated in relevant part,

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The FCRA section that the Beatties depend upon, 15 U.S.C. 1681s-2(b), protects
credit reporting agencies, not consumers. See Carney v. Experian Information
Solutions, 57 F.Supp.2d 496 (W.D. Tenn. 1999)([T]he statutorily created obligation
imposed on a furnisher of information is owed only to the consumer reporting agency
not to the consumer, and an individual such as plaintiff cannot state a claim under 15
U.S.C. 1681s-2(b).)
(Beattie, May 27, 2003, p. 10). Upon reconsideration, and after the filing of an Amicus Curie brief
by the National Association of Consumer Advocates, the Fourth Circuit issued an amended opinion
that struck and removed the Court=s erroneous reference to Carney. (Beattie, June 27, 2003). In its
place, the Court of Appeals substituted,
Although NationsCredit had a general duty under subsection (a) to report accurate
information, 15 U.S.C. 1681s-2(a)(1)(A), the Beatties make no argument that they
complained to NationsCredit about the in foreclosure language prior to filing this
lawsuit, if they did so at that time, 15 U.S.C. 1681s-2(a)(1)(B). Furthermore, 15
U.S.C. 681s-2(c) and (d) limit enforcement of subsection (a) to Federal agencies
and officials and . . . State officials. Likewise, subsection (b) is not applicable
because this portion of the FCRA imposes a duty on NationsCredit only after
receiving notice that the Beatties filed a dispute with a credit reporting agency,
challenging the accuracy of a credit report. 15 U.S.C. 1681i(a)(2).
(Beattie, June 27, 2003, p. 10). More recently, the Fourth Circuit sustained a jury verdict against a
furnisher under s-2(b). Johnson v. MBNA, 357 F.3d 426 (4th Cir. 2004).
The district courts have also overwhelmingly found a private cause of action under s-2(b). VazquezGarcia v. Trans Union de Puerto Rico, No. 00-2071, 2002 U.S. Dist. LEXIS 20146. at 17 (D.P.R.
Sept. 18, 2002) (In sum, as the FCRA stands today, failure to comply with the requirement of
investigation and response by furnishers of information, provides consumers a private cause of
action for FCRA non-compliance.); Hawthorne v. Citicorp Data Sys., Inc., 216 F. Supp. 2d 45, 48
(E.D.N.Y. June 27, 2002) (Given the expansive definition of >person= and the private cause of
action created by the Act, the plain language of the Act Y allows a consumer, such as Plaintiff, to sue
a furnisher of information, such as Defendant Citibank, for damages.); Thomasson v. Bank One,
137 F. Supp. 2d 721, 723 (E.D. La. 2001) (The consumer may bring a cause of action against the
furnisher if it does not comply with the provisions of ' 1681s- 2(b).); Whitesides v. Equifax Credit
Info. Serv., 125 F. Supp. 2d 807, 812 (W.D. La. 2000) (If the furnisher does not comply with the
provisions of 1681s-2(b), the consumer may bring a cause of action against the furnisher for either
willful or negligent noncompliance.); McMillan v. Experian Info. Servs., 119 F. Supp. 2d 84, 89 (D.
Conn. 2000) ([T]he plain language of Section 1681n and Section 1681o when read in conjunction
with Section 1681s-2, expressly provides a consumer remedy for violation by a furnisher of credit
information of the obligations imposed under 15 U.S.C. 1681s-2(b).); Scott v. Amex/Centurian
S&T, No. 01-1594, 2001 U.S. Dist. LEXIS 18905, at 11 (N.D. Tex. Nov. 16, 2001) (The plain
language of Section 1681n and Section 1681o when read in conjunction with Section 1681s-2,
expressly provides a consumer remedy for violation by a furnisher of credit information of the
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obligations imposed under 15 U.S.C. ' 1681s-2(b). (quoting McMillan)); Olexy v. Interstate
Assurance Co., 113 F. Supp. 2d 1045, 1048 (S.D. Miss. 2000) ([T]he FCRA does provide a private
right of action by a consumer for a violation of subsection (b) of 1681s-2.); Dornhecker v.
Ameritech Corp., 99 F. Supp. 2d 918, 926 (N.D. Ill. 2000) ([T]he court concludes that individual
consumers do have a private right of action against a furnisher of information under Subsection (b)
of Section 1681s-2 of the FCRA.); DiMezza v. First USA Bank, Inc., 103 F. Supp. 2d 1296 (D.N.M.
2000) (finding private right of action); Campbell v. Baldwin, 90 F. Supp. 2d 754, 756 (E.D. Tex.
2000) ([P]laintiffs can bring suits [under section 1681s-2(b)] against persons who do not comply
with the provisions of the FCRA that deal with the proper methods to follow when there is a dispute
as to the information provided.); Johnson v. United States, No. 99-1699, 2000 U.S. Dist. LEXIS
21087, at *8 (D. Minn. Oct. 17, 2000) (The Carney decision stands, apparently alone, against a
significant number of decisions finding that both the plain language of the FCRA and its legislative
history compel the opposite conclusion: that consumers have a direct cause of action against
furnishers of credit information under 15 U.S.C. 1681s-2(b).); Mandly v. Bank One Dayton, No.
99-1358, 2000 U.S.Dist. LEXIS 16269 (D. Ariz. Sept. 18, 2000) ([T]he Court finds that Plaintiff
does have a private right of action against Defendant as a furnisher of information under Subsection
(b) of Section 1681s-2 of the FCRA.); Hawthorne v. Citicorp Data Sys., 2001 U.S. Dist. Lexis
11483 (E.D. N.Y. 2002); Mandly v. Bank One Dayton, 2000 U.S. Dist. Lexis 16269 (D. Ariz. 2000).
2. A Consumers Claims under 15 U.S.C. 1681s-2(b).
The claim which a consumer may bring against a creditor furnisher under the FCRA is solely under
15 U.S.C. 1681s-2(b). This subsection requires a furnisher to conduct a reasonable
investigation of a consumers dispute after it receives notice of that dispute through the CRA.
While the furnisher may conduct an investigation upon receipt of a dispute made to it directly by the
consumer, there is no FCRA remedy available to the consumer if the furnisher does not do so.
Accordingly, more than any other matter, it is critical that a consumer make his credit reporting
disputes through the CRAs.
As amended by FACTA, 15 U.S.C. 1681s-2(b) states:
(b) Duties of Furnishers of Information upon Notice of Dispute
(1) In general. After receiving notice pursuant to section 611(a)(2) [ 1681i] of a
dispute with regard to the completeness or accuracy of any information provided
by a person to a consumer reporting agency, the person shall
(A) conduct an investigation with respect to the disputed information;
(B) review all relevant information provided by the consumer reporting
agency pursuant to section 611(a)(2) [ 1681i];
(C) report the results of the investigation to the consumer reporting agency;
(D) if the investigation finds that the information is incomplete or inaccurate,
report those results to all other consumer reporting agencies to which the
person furnished the information and that compile and maintain files on
consumers on a nationwide basis; and
(E) if an item of information disputed by a consumer is found to be
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inaccurate or incomplete or cannot be verified after any reinvestigation under

paragraph (1), for purposes of reporting to a consumer reporting agency only,
as appropriate, based on the results of the reinvestigation promptlyB
(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of information.
As amended, 1681s-2(b) imposes five separate duties upon a furnisher. These duties are triggered
by a dispute Awith regard to the completeness or accuracy@ of the information provided by the
furnisher to the CRA. 15 U.S.C. 1681s-2(b)(1). The first and second of these, 1681s2(b)(1)(A) and (B), require a furnisher to conduct an investigation and in doing so to review all
relevant information provided by the CRA. As detailed above, the CRAs do not forward all
relevant information to the furnishers, thus rendering (B) mute. But the requirements of (A), to
conduct an investigation, are extensive. In accordance with its ordinary, contemporary, and
common meaning, an investigation is a detailed inquiry or systematic examination. Am.
Heritage Dictionary 920 (4th ed. 2000), as cited in Johnson v. MBNA, 357 F.3d 426 (4th Cir. 2004).
By the use of the term investigation, Congress intended to impose a rigorous standard requiring
more than a minimal examination.
Every court known to the author, which has considered the standard for a s-2(b) investigation has
required a reasonable investigation. Johnson, 357 F.3d 426; Agosta v. Inovision, 2003 WL
22999213 (E.D.Pa. Dec. 16, 2003); Buxton v. Equifax Credit Info. Servs., Inc., 2003 WL 22844242
(N.D.Ill. Dec. 1, 2003); Wade v. Equifax, 2003 WL 22089694 (N.D.Ill. Sept. 8, 2003); Betts v.
Equifax Credit Info. Servs., Inc., 245 F.Supp.2d 1130 (W.D.Wash. 2003); Olwell v. Med. Info.
Bureau, 2003 WL 79035 (D.Minn. Jan. 7, 2003); Kronstedt v. Equifax, 2001 WL 34124783
(W.D.Wis. Dec. 14, 2001); Bruce v. First USA Bank, 103 F.Supp.2d 1135 (E.D.Mo. 2000).
However, until the Fourth Circuit issued its opinion in Johnson, no circuit court had confirmed this
plain reading of the section. Even amongst the District court opinions to address the question, none
had provided more than a brief discussion of the s-2(b) standard. In February 2004, the Fourth
Circuit upheld a jury verdict under 1681s-2(b) against MBNA by unanimous published opinion.
In same, the court offered a detailed statement of a furnishers responsibilities in conducting an
investigation. Johnson, 357 F.3d 426.
In Johnson, the Court considered the MBNA investigation procedures, by which the furnisher
reviewed only its computer account summary and never examined its original documents. Johnson
held that a reasonable jury could find these procedures unreasonable. This holding will require
furnishers throughout the industry to revise and correct their investigation procedures. Currently,
the author is not aware of any furnisher who actually consults their original documents or records (in
microfiche, pdf, paper or any other form) in conducting an s-2(b) investigation. This is in part
because of the incorrect information the CRAs have provided to their subscribers.
Nearly every major furnisher who has been deposed has confessed to a policy of automated
investigations in which the consumer has almost no hope of obtaining relief. The furnishers merely
proofread the form from the CRA and match it to the data within their computers account screen.
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There is no other means by which to verify and correct a credit reporting dispute once the error has
worked its way into the furnisher=s computer account record. In a May 21, 2003 deposition, Capital
Ones representative confirmed this fact for her employer.
Q Okay. What kinds of information do your ACDV operators have available to them
through the interface of the Odyssey system?
A Name, address, ECOA, pay history, cycle11 date, last date paid. Statements, action or
activity on the account, late fees, past-due fees, membership fees, etc.
Q What about original application information?
A That, we cannot see in Unisys.
Q All right. Is there a reason why it is that your ACDV operators do not have access to all of
the 18 other systems that I mentioned, being Tandem, CHIA, Retain One, Casper, Baltrax,
Amdahl, Capstone, and Rocky?
A Yeah, I'll give you the simplified answer first. Based on what my associates do, which is
to verify the information, the -- some of the systems that you mentioned there are for indepth research; my associates do not complete in-depth research.
When questioned further as to why Capital One would never conduct in-depth research
of FCRA disputes, the representative explained that the furnishers procedures were developed in
collaboration with the three bureaus, and that this is the policy which was developed through
such involvement.
Q Okay, why is it that your associates do not complete in-depth research?
A They do that because, when the -- we had three bureau reps actually come to Capital One
in I can verify this, I want to say it was like February of 2000
Q When you say -- let me stop you here for a minute and interrupt, I'm sorry -- you say three
bureau reps, do you mean a rep from each of the 10 different bureaus or from combinations
thereof?
A I'm sorry, a representative from each bureau came on three separate visits, so a Trans
Union rep came, Experian rep, and then an Equifax rep.
Q Okay.
A And they came to explain to my team how to more properly and more accurately work
accounts, the cases. One of the questions that I had for them, as a manager, was should we
verify the accounts -- and I even explained to them what my definition of verify is -- which
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is, we pull up our system of record, in this case Unisys or Beast, we look at what the bureau
has sent us on the ACDV. If there are any discrepancies, we make sure that what the bureau
has mirrors exactly what we, as Capital One, have. That's verifying.
Q That was what you described to the representatives as verifying?
A Yes.
Q And what did they say in response to that?
A Well, I actually followed that up with, Do you want us to do that, or do you want us to
do things such as pull statements, etc., actually do the research which would involve CHIA.
And in each case, the bureau rep said, No, we want you to verify it. We want you to make
our system look like your system. So that's what we've been doing.
Upon the third of a furnisher obligations under 1681s-2(b), the creditor must report the results of
the investigation to the consumer reporting agency. 15 U.S.C. 1681s-2(b)(1)(C). Sometimes, a
furnisher may not be able to conclusively determine through its standard procedures whether or not
information or an account are correctly reported. Under these circumstances, the furnisher must still
report Athe results of the investigation@ to the CRA. If a furnisher cannot conclusively determine
the accuracy of its data, it must inform the CRA of the limitations of its investigation. In addressing
MBNAs claim that it no longer retained its original credit applications, the Fourth Circuit held that
MBNA could have at least informed the credit reporting agencies that [it] could not conclusively
verify that Johnson was a c-obligor. Johnson, 357 F.3d at 432.
In addition to the above requirements, 1681s-2(b) also requires a furnisher to inform all other
CRAs to whom it has reported, of the results of its investigation. 15 U.S.C. 1681s-2(b)(1)(D).
The final requirement obligates the furnisher to correct its own internal records to ensure that the
inaccuracy does not get re-reported. 15 U.S.C. 1681s-2(b)(1)(E).
After Johnson, furnishers are under a more definite obligation to review and examine their original
documents. In the context of an identity theft case, the consumer should insist that the CRA and the
furnisher compare documents and signatures. The dispute letters provided with these materials seek
to do just that. When sending the CRAs a consumer dispute, demand in the text of the letter that the
CRA forward the letter and its enclosed documents to the furnisher. Include copies of a drivers
license, old credit card signature line, or cancelled checks by which the CRA and furnisher could
compare signatures and conclude that the obligation did not belong to that consumer. When the
CRAs ignore this request, as they unfortunately will, the Court and ultimately the jury will have a
much clearer view of these systematic FCRA violations.

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