Many people that visit credit repair forums read about Section 623 of the Fair Credit Reporting Act (FCRA), which outlines the so-called rights of a consumer to dispute questionable information directly with the OC (original creditor). Although often touted as a useful credit repair tool that imposes responsibilities on the OC comparable to those imposed on the credit bureaus under Section 611, Section 623 is not what is seems.
No Incentive – No Penalty
Creditors are not in the business of processing disputes, nor are they especially altruistic. Do you imagine that they would voluntarily spend any time managing investigation requests if they did not have to? This is precisely problem with Section 623. The OC simply has no incentive to invest any time on disputes sent to them by consumers. Section 623 gives the OC an all encompassing list of escape clauses allowing them to disregard consumer disputes. And then to seal the deal the FCRA removes any legal liability they have in the case they fail to comply.
Frivolous Dispute Determination
Section 623 (F) allows an employee of an OC to subjectively decide if a dispute is frivolous and disregard it. The list of reasons allowing the OC to reject a dispute include failure of the consumer to include complete documentation, and submission of a dispute that is substantially the same as a dispute submitted to one or more of the credit bureaus.
§ 623. (a)(8) ABILITY OF CONSUMER TO DISPUTE INFORMATION DIRECTLY WITH FURNISHER
(D) SUBMITTING A NOTICE OF DISPUTE- A consumer who seeks to dispute the accuracy of information shall provide a dispute notice directly to such person at the address specified by the person for such notices that–
(i) identifies the specific information that is being disputed;
(ii) explains the basis for the dispute; and
(iii) includes all supporting documentation required by the furnisher to substantiate the basis of the dispute.
(F) FRIVOLOUS OR IRRELEVANT DISPUTE-
(i) IN GENERAL- This paragraph shall not apply if the person receiving a notice of a dispute from a consumer reasonably determines that the dispute is frivolous or irrelevant, including–
(I) by reason of the failure of a consumer to provide sufficient information to investigate the disputed information; or
(II) the submission by a consumer of a dispute that is substantially the same as a dispute previously submitted by or for the consumer, either directly to the person or through a consumer reporting agency under subsection (b), with respect to which the person has already performed the person’s duties under this paragraph or subsection (b), as applicable.
Getting Credit Repair Results
Your credit repair effort is best focused on the actions that are most likely to produce results. Your real leverage is with the credit bureaus, which are fully equipped to process disputes. And in spite of the occasional lapse of responsiveness, the bureaus are actually very compliant!
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