Regulation F FAQ: Disputes

Today, we're answering questions about Disputes, with assistance from John Bedard of Bedard Law Group, and Leslie Bender of Clark Hill.

Would it be helpful to treat all disputes as if they were FCRA disputes?

No.

Each dispute must be treated appropriately based on the content of the dispute. It is advisable for your agency to map out FDCPA and FCRA dispute strategies and the steps you take in each instance:  

FDCPA Disputes

There is not a “frivolous or irrelevant” dispute category under the FDCPA. A timely dispute under the FDCPA requires suspension of debt collection activities until debt verification is provided. However, a collection agency does not have to respond to the dispute within a set timeframe. (Just to repeat a different way: Under the FDCPA, when a consumer disputes, you must cease collection efforts. You cannot start collection efforts again until you have responded to the dispute.)

FCRA Disputes 

Under the FCRA, there is a 30-day time frame for handling disputes. There is often confusion between these different treatments of disputes. By deciding to treat all disputes as if they were FCRA disputes and documenting that strategy, you could expose yourself to risk in a number of ways: if the customer is not really disputing per the FCRA but you note a dispute on the customer’s credit file, one might argue that is inaccurate or misleading.

Frivolous dispute under CRA - What's your recommendation?

When furnishers determine that a direct dispute is frivolous, then the furnisher should follow the Frivolous Dispute Procedures spelled out in the FCRA. (See § 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i] on page 50 of the FCRA.)

There is no such thing as a frivolous E-oscar dispute for investigation and response purposes.

The challenge with "frivolous disputes" is that people are reluctant to log in and provide personal information in a portal they are not familiar with. How do you overcome that?

Some agencies have a form letter they send, acknowledging receipt of a dispute and checkboxes requesting additional information from the consumer to enable the agency to research and respond with a time frame; and a second follow-up letter noting nothing has been received in the expected timeframe. If the agency hears nothing further from the customer within [x] days it will assume the customer resolved the dispute to their satisfaction. In addition, some agencies have dedicated dispute personnel who are noted in this two-letter series who are trained to ask probing questions to get more information.