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May 2001Court Says Furnishers Face Reinvestigation Liability Under FCRA The U.S. District Court for the Northern District of Illinois has ruled that consumers may sue those who furnish data to credit reporting agencies for failure to carry out their reinvestigation responsibilities under Section 623 of the Fair Credit Reporting Act (FCRA). (Dornhecker v. Ameritech Corp., N.D. Ill., No. 00 C 26, 6/7/00). The judge ruled that while the FCRA does not specifically create such a liability, one could be implied from the way the law is written. The case involved telephone accounts that were fraudulently opened in some consumers’ names. When the subsequent debts were not paid, the phone company retained a collection firm to pursue the bad debts. The collector reported the adverse information to the credit reporting agencies and when the consumers found out about it they asked the credit reporting agencies for reinvestigation of the data as well as reported the fraud to the phone companies. Two of the consumers sued the phone company, alleging it violated Section 623(b)(1) of the FCRA by failing to properly reinvestigate the disputed data. The phone company said it was only obligated to pursue a reinvestigation when contacted by the credit reporting agency. The consumers argued that furnishers’ duties under 623(b)(1) are indeed owed to consumers. They pointed out that Congress’ exemption of furnishers from liability under subsection (a) implicitly made them liable under subsection (b). If Congress had meant to exempt furnishers from liability under subsection (b), it would have stated that fact as it did in subsection (a). The court said it ruled as it did because it’s apparent consumers are members of a class that the FCRA sought to protect and that legislative history shows an affirmative attempt by Congress to hold furnishers of information accountable if they continue to supply inaccurate data after they have been notified. It also backed its decision based on two cases that had been previously adjudicated. The first involved a similar suit by a consumer over reinvestigation responsibilities under 623 (b)(1). The court held that “there is not authority supporting the proposition that the FCRA does not create a private right of action”. The court recognized that furnishers were exempt from civil liability from subsection (a), the FCRA did give consumers a cause of action against “persons” who are willful or negligent in complying with the Act. The second citation concerned a case that set forth factors for determining if a private cause of action is implicit in a statute. Saying this case met all four factors, the court concluded that the consumers could file suit against furnishers of data for failing to comply with Section 623 (b)(1). Communicator, September 2000 ß 623. Responsibilities of furnishers of information to consumer reporting agencies[15 U.S.C. ß 1681s-2] (b) Duties of furnishers of information upon notice of dispute.
It’s As Easy as A, B, C . . .Our goal at the Credit Bureau is to stay in touch with our clients. You can expect periodic phone calls and monthly remittance statements, along with a newsletter. In addition, we create an array of reports, both standard and customized to meet your needs. These reports can be formatted and sent any way you like. We automatically forward a bi-annual report to you to help diagnose our performance. Please feel free to call us at 800-710-4821 or 734-665-6173 if you have any questions, or if we could be of assistance in any way. We are just a phone call away and always eager to help. It’s as easy as A, B, C. Kate Melasi Technology UpdateOur most recent software advancement to help us recover the your bad debt includes the latest technology for our internal skip-tracing methods. This is a significant addition to our comprehensive procedures currently utilized to locate your debtors during our professional collection service. Through a skip-tracing company, Lexis-Nexis, we have implemented two new access methods in the very costly and never ending battle to locate debtors. The first access method involves a customized Credit Bureau-based web-site that provides us unlimited connectivity to over 28,000 different databases. Yes, 28,000! We are very excited with the recent results that include the following highlights: Bankruptcy petitions, discharges and dismissals from all 50 states. Social Security death benefits master list for 48 million individuals. Nationwide white pages directory and person locater of over 300 million records. (Sources include, Address, phone and employment. Electronic directory assistance from AT & T and Ameritech.) Department of Motor vehicles registration and Driver License search from all 50 states. Business filings with Secretaries of State from 45 states. (Is it possible to have too much information? Not in our business!) The second access method for our skip-tracing technological windfall involves our ability to batch thousands of accounts through the same multitude of databases with a seamless turnaround within 24 hours that updates directly to our collectors screen. Together these newly implemented procedures for bankruptcy, estate verification and locating debtors should give us the edge in recovering more of your receivables. Although this means we have perfected our already advanced ability to locate your debtors, nothing can stand against the damage that time can impose on your recovery. So remember, identify your problem accounts early and do not delay in sending them to us. Thomas J. Oldani |
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Ann Arbor Credit Bureau, Inc.
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