Auto Dealer Fined for Violating Fair Credit Reporting Act

We all know that inaccuracies in your credit report can have a huge impact on your ability get credit. You can be denied an apartment lease, a car loan, mortgage or even a job! Good credit is sometimes everything especially in a modern economy like ours.

Therefore, the government has gone to great lengths to ensure consumers get a fair shake by having the ability to correct mistakes on their credit histories. Consumers can file a dispute with one or all three credit bureaus as well as the company that provided information to the bureaus.

The company providing the information is subject to what is known as the Furnisher Rule under the Fair Credit Reporting Act.

The Rule requires companies that report information about consumers to credit bureaus to have policies and procedures designed to ensure that the information is accurate and, most importantly, to have a mechanism for consumers to dispute information they believe is inaccurate.

The fact that this has to be codified to law goes to show the disadvantage consumers are often facing when dealing with well-heeled business entities. Requiring a company to verify the accuracy of its own information and allow consumers to dispute said information if it is incorrect should be common sense! Nonetheless, the rule had to be put in place. But even with this rule in place there are those who do not abide by it.

A Texas auto dealer failed to do just that. Once contacted by consumers disputing information the dealer had provided to the credit bureaus, the dealer simply sent them back to the bureaus. No investigation or examination of their own records. Nada. The dealer simply pointed a finger elsewhere.

For their dereliction of duty under the Furnisher Rule the FTC levied a significant fine that ought to be a wakeup call.

To reiterate, the Furnisher Rule requires the company or person reporting information to the credit bureaus to ensure it is accurate. Secondly, if a consumer disputes the information then the provider must conduct some review or investigation to ensure the dispute is addressed.