A CreditFactors subscriber had been disputing with HSBC directly after reading about the “623 method” on the web. It took a while to get the point across that many provisions of the FCRA are totally useless.
Unfortunately, there is lots of misinformation on the web about NEW RIGHTS under the 2003 FCRA amendment (FACT Act) and many credit sites recommend disputing with creditors directly.
Many credit repair companies also send frivolous disputes directly to CREDITORS. Of course the credit repair mills don’t send disputes with the intent to sue because the disputes are frivolous and they try to delay corrections so that their clients continue to pay longer.
However, if you are a credit professional, you are NOT sending frivolous disputes and you should know the basics about establishing legal claims for your clients.
From the FCRA:
§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]
(c) Limitation on liability. Except as provided in section 621(c)(1)(B), sections 616 and 617 do not apply to any violation of–
(1) subsection (a) of this section, including any regulations issued thereunder;
Section 623 (a) contains the touted new requirements for data furnishers, section 621 is “Administrative enforcement” and sections 616 and 617 are the sections giving consumers the right to sue.
Data furnishers have absolutely NO liability to consumers for failing to comply with section 623(a) requirements.
And that explains why creditors couldn’t possibly care less about compliance.
ONLY regulators can enforce section 623 (a) compliance.
Have the client mail disputes to a creditor directly if also disputing with the CRAs and the client is going to sue if the reporting is not corrected. In other words, dispute with the creditor directly if it’s important. Since the CRAs often don’t provide the actual disputes submitted by consumers to the creditors, COMPLETE and FACTUAL disputes with creditors IN ADDITION to the CRA disputes might result in larger punitive damages or settlements.
Do NOT send letters to creditors because of “rights” under FCRA 623(a) as consumers have NO legal rights after violations.
It especially unprofessional to demand “validation” of debts from creditors and makes the client look bad.
If it’s NOT the client’s account, have him/her send a notarized fraud affidavit. Demanding validation indicates that the client is a liar.
The 2003 FACT Act weakened the FCRA and added countless pages of ludicrous and bizarre requirements to confuse consumers and even lawyers.
It makes it easy for credit bureaus and creditors to get lawsuits dismissed because consumers don’t have the right to sue for most violations.
While the regulators COULD enforce consumer legislation, they refuse to do so. So let’s just get rid of all that harmful fluff and stick to laws that mean something.