FTC: Dispute Credit Report Item Directly with ‘Furnisher’

Credit reportsConsumers will be able dispute inaccurate information about them directly with the information furnishers, including financial institutions that provide negative items to the three credit reporting agencies, according to a new rule by the Federal Trade Commission that takes effect July 1.
The FTC confirmed that the so-called Furnisher Rule is set for implementation during a hearing by a House panel yesterday on consumer credit reporting and scoring issues.
David Vladeck, director of the FTC’s Bureau of Consumer Protection, testified that the FTC has completed most of the projects required by the Fair and Accurate Credit Transactions Act of 2003, including the rules that call on companies that furnish information on someone’s payment history, defaults or other items to the credit agencies to “improve the accuracy of information they provide.”
The rules give consumers the right to dispute errors in their credit reports directly with the furnishers of the information, in addition to disputing errors with consumer reporting agencies.
The FTC provided guideline examples last year. Furnishers should report certain additional information when necessary to keep what they report from “creating a misleading impression about a consumer’s creditworthiness.”  The guidelines specify one such circumstance where furnishers generally would need to include a consumer’s credit limit among the information they furnish to a credit reporting agency.
Beginning July 1, the furnishers of credit-related information are required in most cases to investigate disputes that consumers submit directly to them regarding the accuracy of items relayed to the credit bureaus.
“Previously, the law encouraged consumers to submit their disputes through a credit reporting agency, rather than directly to a furnisher,” the FTC states.
Vladeck testified yesterday before the House Subcommittee on Financial Institutions and Consumer Credit that the FTC is working to ensure the accuracy of credit reports, help prevent identity theft and give consumers “a better understanding of their credit scores and what they mean.”
One such action was a revised rule in the credit card reform laws requiring “free” credit report ads to clearly disclose that they are not the federally-mandated free reports. The FTC also required nationwide credit reporting agencies to delay advertising for products and services through AnnualCreditReport.com until after consumers have received their free report.
This rule takes effect on April 2, 2010, with certain provisions for TV and radio ads taking effect on September 1, 2010.
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