CFPB, FTC say court ruling would undercut credit reporting law

The Consumer Financial Protection Bureau and the Federal Trade Commission say that a 2021 federal court decision could limit protections for consumers looking to remove errors on their credit reports.

In a court filing this week, the two agencies argued that the ruling “undercuts a central remedial purpose” of the Fair Credit Reporting Act. The law requires banks, mortgage lenders, debt collectors and other companies that furnish .rmation used in credit reports to investigate any disputes and correct errors.

The case involves a Pennsylvania man, Stefan Ingram, who reported that a Comcast account opened under his name was fraudulent.

The Consumer Financial Protection Bureau and the Federal Trade Commission argue that a federal judge’s ruling last year risks opening a loophole under the Fair Credit Reporting Act.


Ingram’s debt under the account was sent to a debt collection agency. After Ingram’s lawyer asked for the .rmation to be scrapped from his credit report, Comcast asked for a police report and determined that the account wasn’t fraudulent absent more .rmation.

Ingram sued Equifax, Experian and Comcast as part of the original lawsuit, and he settled with those companies in 2019.

Last year, a federal judge ruled sided with the remaining defendant, the debt collector Waypoint Resources Group. The judge wrote that Ingram had “failed to provide sufficient .rmation” so that Waypoint could investigate the issue, calling his complaint “frivolous.”

Now the CFPB and FTC are taking issue with the ruling. They submitted a “friend of the court” brief with the U.S. Court of Appeals for the Third Circuit, w. Ingram’s lawyers are hoping to get the earlier decision overturned.

The two federal agencies argued that the law is clear that companies that furnish .rmation to credit reporting agencies must investigate any disputes. They also wrote that the judge’s ruling could lead to companies not advising consumers that their dispute was deemed frivolous, “leaving consumers in the dark.”

“Allowing furnishers to reject purportedly frivolous disputes risks opening a loophole to this rule, consumers may never be advised of the outcome of their disputes and will not be provided the .rmation necessary to cure any deficiencies,” the CFPB wrote in a summary of the brief posted on its website. “As a result, inaccuracies in credit reports may go uncorrected.”

Consumer complaints relating to credit reports would likely increase as a result, the two agencies wrote in their filing.

The CFPB has taken aim at credit reporting bureaus for what it says is a frequent failure to help customers resolve issues. Complaints to the CFPB about credit bureaus made up 59% of the issues that consumers flagged for the CFPB between January 2020 and September 2021, far more than any other category. The next-highest type of complaint involved debt collection companies, which made up 15% of complaints during that time period.

The Consumer Data Industry Association — which represents the credit bureaus Equifax, Experian and TransUnion — has attributed the increase in complaints to credit repair firms. Those companies file millions of complaints, inflating overall numbers and undermining the process for the removal of errors in response to legitimate requests, according to the credit bureaus’ trade group.