(a) General rule. Except as otherwise provided in this section,
a furnisher must conduct a reasonable investigation of a direct dispute
if it relates to:
(1) The consumer’s liability for a credit
account or other debt with the furnisher, such as direct disputes
relating to whether there is or has been identity theft or fraud against
the consumer, whether there is individual or joint liability on an
account, or whether the consumer is an authorized user of a credit
account;
(2) The terms
of a credit account or other debt with the furnisher, such as direct
disputes relating to the type of account, principal balance, scheduled
payment amount on an account, or the amount of the credit limit on
an open-end account;
(3) The consumer’s performance or other conduct concerning an account
or other relationship with the furnisher, such as direct disputes
relating to the current payment status, high balance, date a payment
was made, the amount of a payment made, or the date an account was
opened or closed; or
(4) Any other information contained in a consumer report regarding
an account or other relationship with the furnisher that bears on
the consumer’s creditworthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode of
living.
(b) Exceptions. The requirements of paragraph (a) of this section
do not apply to a furnisher if:
(1) The direct dispute relates to:
(i) The consumer’s
identifying information (other than a direct dispute relating to a
consumer’s liability for a credit account or other debt with the furnisher,
as provided in paragraph (a)(1) of this section) such as name(s),
date of birth, Social Security number, telephone number(s), or address(es);
(ii) The identity of
past or present employers;
(iii) Inquiries or requests for a consumer
report;
(iv) Information
derived from public records, such as judgments, bankruptcies, liens,
and other legal matters (unless provided by a furnisher with an account
or other relationship with the consumer);
(v) Information related to fraud alerts
or active duty alerts; or
(vi) Information provided to a consumer
reporting agency by another furnisher; or
(2) The furnisher has a reasonable
belief that the direct dispute is submitted by, is prepared on behalf
of the consumer by, or is submitted on a form supplied to the consumer
by, a credit repair organization, as defined in 15 U.S.C. 1679a(3),
or an entity that would be a credit repair organization, but for 15
U.S.C. 1679a(3)(B)(i).
(c) Direct dispute address. A furnisher is
required to investigate a direct dispute only if a consumer submits
a dispute notice to the furnisher at:
(1) The address of a furnisher provided
by a furnisher and set forth on a consumer report relating to the
consumer;
(2) An address
clearly and conspicuously specified by the furnisher for submitting
direct disputes that is provided to the consumer in writing or electronically
(if the consumer has agreed to the electronic delivery of information
from the furnisher); or
(3) Any business address of the furnisher if the furnisher has not
so specified and provided an address for submitting direct disputes
under paragraphs (c)(1) or (2) of this section.
(d) Direct dispute notice contents. A dispute notice must include:
(1) Sufficient information to identify
the account or other relationship that is in dispute, such as an account
number and the name, address, and telephone number of the consumer,
if applicable;
(2)
The specific information that the consumer is disputing and an explanation
of the basis for the dispute; and
(3) All supporting documentation or other
information reasonably required by the furnisher to substantiate the
basis of the dispute. This documentation may include, for example:
a copy of the relevant portion of the consumer report that contains
the allegedly inaccurate information; a police report; a fraud or
identity theft affidavit; a court order; or account statements.
(e) Duty of
furnisher after receiving a direct dispute notice. After receiving
a dispute notice from a consumer pursuant to paragraphs (c) and (d)
of this section, the furnisher must:
(1) Conduct a reasonable investigation
with respect to the disputed information;
(2) Review all relevant information provided
by the consumer with the dispute notice;
(3) Complete its investigation of the dispute
and report the results of the investigation to the consumer before
the expiration of the period under section 611(a)(1) of the FCRA (15
U.S.C. 1681i(a)(1)) within which a consumer reporting agency would
be required to complete its action if the consumer had elected to
dispute the information under that section; and
(4) If the investigation finds that the
information reported was inaccurate, promptly notify each consumer
reporting agency to which the furnisher provided inaccurate information
of that determination and provide to the consumer reporting agency
any correction to that information that is necessary to make the information
provided by the furnisher accurate.
(f) Frivolous or irrelevant disputes.
(1) A furnisher is not required
to investigate a direct dispute if the furnisher has reasonably determined
that the dispute is frivolous or irrelevant. A dispute qualifies as
frivolous or irrelevant if:
(i) The consumer did not provide sufficient
information to investigate the disputed information as required by
paragraph (d) of this section;
(ii) The direct dispute is substantially
the same as a dispute previously submitted by or on behalf of the
consumer, either directly to the furnisher or through a consumer reporting
agency, with respect to which the furnisher has already satisfied
the applicable requirements of the Act or this section; provided,
however, that a direct dispute is not substantially the same as a
dispute previously submitted if the dispute includes information listed
in paragraph (d) of this section that had not previously been provided
to the furnisher; or
(iii) The furnisher is not required to investigate the direct dispute
because one or more of the exceptions listed in paragraph (b) of this
section applies.
(2) Notice of
determination. Upon making a determination that a dispute is
frivolous or irrelevant, the furnisher must notify the consumer of
the determination not later than five business days after making the
determination, by mail or, if authorized by the consumer for that
purpose, by any other means available to the furnisher.
(3) Contents of notice of determination that a dispute is frivolous or
irrelevant. A notice of determination that a dispute is frivolous
or irrelevant must include the reasons for such determination and
identify any information required to investigate the disputed information,
which notice may consist of a standardized form describing the general
nature of such information.
