UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Division of Credit Practices
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Bureau of
Consumer Protection
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December 23, 1997
Jack Harvey, III
Regulatory Analyst
ALLTEL Information Services
Financial Services Division
4001 Rodney Parham Road
Little Rock, AR 72212-2496
Re: Sections 623(a)(3) and 623(a)(5) of the Fair
Credit Reporting Act
Dear Mr. Harvey:
This is in response to your letter dated September 4, 1997 concerning
the responsibilities of furnishers of information to consumer
reporting agencies.
First, you ask whether a furnisher of information may cease reporting
information disputed by a consumer until the furnisher and consumer
have resolved the dispute. You note that ALLTEL believes it best
to cease reporting disputed information until a resolution of
the dispute is reached in order to be fair to the consumer and
to supply the most accurate information for use by others in making
business decisions concerning that consumer.
Section 623(a)(3) of the Fair Credit Reporting Act ("FCRA")
concerns the reporting of information to consumer reporting agencies
once the consumer has notified the furnisher that information
is disputed. That section states that when a consumer disputes
the completeness or accuracy of any information furnished to a
consumer reporting agency, the information in question may not
then be furnished without notice that it is disputed by the consumer.
That provision addresses the furnisher's obligation only when
the furnisher continues to report disputed information. The statute
is silent on the matter of the furnisher ceasing to report information
while it is investigating the dispute. It is thus the opinion
of the Commission staff that a furnisher that temporarily ceases
to report disputed information while it investigates the matter,
and then either (1) corrects the information if its investigation
results in agreement with the consumer or (2) reports the item
as disputed by the consumer where that is the result of the investigation,
would comply with Section 623(a).
Second, you ask for clarification of the requirements concerning
the reporting of delinquent accounts, specifically the requirement
that the furnisher report the date of the commencement of the
delinquency that immediately precedes a collection action, charge
to profit or loss or other similar action. You note that compliance
with this provision presents problems for data processing systems,
particularly where an account has been delinquent for several
payment periods prior to being placed for collection or similar
action. Further, you note that it is your understanding that an
alternate date, such as the due date or paid-to date at the time
of the collection activity, would be sufficient for compliance
purposes. I understand from my discussion with you that you define
the "paid-to date" as the due date of the last
paid periodic installment.
Section 623(a)(5) of the FCRA concerns the duty of furnishers
to provide a notice of the delinquency date of accounts to consumer
reporting agencies. This section provides that persons who furnish
"information to a consumer reporting agency regarding a delinquent
account being placed for collection, charged to profit or loss,
or subjected to any similar action shall . . . notify the agency
of the month and year of the commencement of the delinquency that
immediately preceded the action." The provision is clear
that furnishers must provide to consumer reporting agencies the
month and year of the commencement of the delinquency
that immediately preceded placement for collection, charge to
profit and loss, or similar action. Thus, under the plain language
of the statute there is no allowance for the use of an alternate,
later date; you must use the statutory date for reporting. Use
of the "paid-to-date" as that term is used in your accounting
system is not acceptable.(1)
The legislative history indicates that Congress included the
requirement of Section 623(a)(5) so that there would be a uniform
date certain by which all consumer reporting agencies would compute
the seven-year reporting period for adverse items of information.
It was the intent that the seven year reporting period begin with
the commencement of the delinquency rather than any other date.(2)
The views set forth in this letter are the views of the staff
and are not binding on the Commission.
Yours truly,
Cynthia S. Lamb
Endnotes:
1. On the other hand, we would not
challenge a decision, driven by administrative convenience, to
use a date certain that was always earlier than the commencement
of the delinquency, as there would be no consumer injury resulting.
2. H.R. Rep. No. 103-486, 103rd Cong.,
2nd Sess. 35, 51 (1994); S. Rep. No. 103-209, 103rd Cong., 1st
Sess. 15, 25 (1993); H.R. Rep. No. 102-692, 102nd Cong., 2nd Sess.
28, 71 (1992).
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