Read the Consent Order Here

  • Source: consumerfinance.gov 

Treliant Takeaway:

Treliant knows the Fair Credit Reporting Act (FCRA). If you need assistance with enhancing your furnishing or use of consumer reporting data, Treliant can help.

Consent Order Highlights:

In November 2020, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with a third-party collector specializing in collection of telecommunications bills. The consent order highlights several errors in consumer reporting:

  • Failing to establish and maintain reasonable policies and procedures to ensure accuracy in consumer credit reporting;
  • Furnishing information to consumer reporting agencies (CRAs) that it knew or had reason to believe was inaccurate;
  • Furnishing inaccurate data regarding the dates that delinquencies commenced;
  • Failing to conduct reasonable and timely investigations of consumer disputes;
  • Failing to notify consumers when disputes had been deemed frivolous or irrelevant and would not be investigated; and
  • Failing to distinguish between disputes under the FCRA and disputes under the Fair Debt Collection Practices Act (FDCPA)

To remedy these flaws, the collector will be required to implement monthly testing covering:

  • Account information provided by the creditor or developed by the collector;
  • The process for converting account information into the appropriate format for furnishing; and
  • Consumer disputes and the collector’s responses.

In addition, the collector will be required to maintain sufficient staffing, facilities, systems and information respond to consumer disputes in a timely and accurate fashion and retain independent consultant(s) specializing in FCRA and Regulation V compliance to conduct an independent compliance review of policies, procedures, and training and to prepare recommendations to be implemented by the collector. The collector will also pay a $500,000 civil money penalty and will be subject to supplemental recordkeeping and reporting requirements for five years.

This consent order is latest in a string of CFPB actions focused on all aspects of debt collection, including credit reporting. If you need assistance ensuring your firm is prepared for scrutiny of its debt collection and credit reporting practices, Treliant can help.

 

Author

Lynn Woosley

Lynn Woosley is a Senior Director with Treliant.  She is a seasoned executive with extensive risk management experience in regulatory compliance, consumer and commercial credit risk, credit and compliance risk modeling, model governance, regulatory change management, acquisition due diligence, and operational risk in both financial services and regulatory environments.