|Received:||4/19/2006 10:03:10 PM|
|Subject:||Procedures to Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies|
|Title:||Advance Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Parts 660 and 661|
Comments:I believe there are several missing things so far form the FCRA and the FACTA. If you have ever had to deal with a furnisher of inofrmation who is reporting something wrong, you'll understand the need for strict guidelines. 1. Proof and burden of proof. It is difficult if not impossible to prove something didn't happen. You can only prove something did happen. If a furnisher claims their records indicate you did something (opened an account, etc.), and you say you did not, you won't have any documentation saying "I never did that". They must be compelled to produce the evidence that the "thing" actually occured. In the case of opening an account, they must provide copies of your signature on something authorizing the opening of that account. If they cannot find it, it must be deleted. 2. Penalties. Right now, the FCRA says furnishers aren't liable for bad reporting (616 and 617 do not apply). They need stiff penalties in place to ensure compliance. Right now, they can only be taken to court by states, and only have penalities imposed after you get an injunction against them. Why should you have to get an injunction to make them do what the law says they are supposed to do. Simply get a determination that they violated it. After enough penalties, furnishers will tighten up their processes. 3. Procedures for ensuring accuracies. Both furnishers and the cra's need better procedures for ensuring accuracy. I recently disputed an erroneous 120+ day late. Anyone with two neurons firing could have seen something was fishy. There was no 90,60 or 30 day late preceeding it. If the cra's had automated software in place checking trades each time they were submitted, they could kick them back to furnishers on the spot. If furnishers had such automated checking software in place before submitting it, they could dramatically reduce the number of submitted errors. Consistecy checks can be automated for the most part, but they should be done. 4 Right to sue: Grant consumers a private right of action to sue furnishers of information for any violation of Section 623 of the FCRA, as amended in 1996, to ensure better compliance and protect the financial system from fraud. 5 Higher furnisher accuracy standard: The new law's limited "knowing" accuracy standard on furnishers should be upgraded to a requirement that furnishers, like credit bureaus, follow "reasonable procedures" to avoid errors. In the interim, agencies should use their administrative enforcement authority to punish banks and department stores that fail to remove fraudulent entries on existing accounts of victims or add fraud accounts to the credit reports of victims. 6 $1000 Minimum damages per violation: The federal FCRA does not provide for minimum statutory damages to consumers for violation of the FCRA by credit bureaus or furnishers. Consumers should not have to tediously prove actual damages in each complaint. Bureaus count on the difficulty of establishing actual damages when they refuse to settle disputes with consumers. Make them actuallly follow the law by being afraid not to.