FTC Joins with CFPB in Filing Amicus Brief Urging Reversal of Decision Misinterpreting FCRA’s Requirement to Remove Disputed, Unverified Credit Information

The Federal Trade Commission has joined the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief in the U.S. Court of Appeals for the Second Circuit urging reversal of a district court decision that the agencies say overlooked the Fair Credit Reporting Act’s requirement to delete information disputed by a consumer that cannot be verified by a furnisher of that information.

The case, Suluki v. Credit One Bank, NA, involves a consumer who allegedly disputed with the credit reporting agencies (CRAs) information on her credit report that she said resulted from multiple credit card accounts that her mother opened in her name without her permission or knowledge. The CRAs sent the dispute to the credit card companies for investigation. After Credit One refused to remove the information and purportedly verified the consumer as the accountholder, she sued the company under the Fair Credit Reporting Act, which requires that, upon being notified of a dispute by a CRA, furnishers investigate whether the disputed information can be verified. If such an investigation is inconclusive, the FCRA requires the furnisher to delete from the data that the furnisher submits to CRAs the information that cannot be verified, according to the FTC-CFPB brief.

The consumer appealed after the district court granted Credit One’s request for summary judgment and held that she could not show harm from any failure by Credit One to conduct a reasonable investigation.

In their brief, the FTC and CFPB disputed the district court’s interpretation of the FCRA. They noted that under the FCRA, if a furnisher of credit information cannot determine whether the disputed consumer information is accurate, it must tell the CRAs that the information could not be verified and must delete it from the data that it reports to the CRAs.

Inaccurate information on a consumer report can hamper people’s ability to get housing, employment, and credit. The FTC and CFPB maintain that the lower court’s decision could impact consumers’ rights under the FCRA to dispute the completeness or accuracy of information and have it removed if a furnisher cannot verify that it is accurate.

The Commission voted 3-0 to join the CFPB amicus brief.