One of our customers is frequently and fairly consistently late in making payments on a consumer open-end line of credit. Everytime the payment is late, we report it and he disputes it with the credit reporting agency. The reporting agency sends us a dispute form, we verify that the payment was indeed late and respond that the report by the bank was accurate.

Would this type of activity fall under "FRIVOLOUS OR ERRELEVANT DISPUTE" 623(a)(8)(F)? To me, it's a different dispute each time since he could reasonably believe that, even though the other payments were late as reported, perhaps the current payment in question WAS paid on time.

Does anyone have an opinion? I would really like to say these claims are frivolous, but cannot justify it. I hate to waste staff time repeatedly addressing a dispute of each and every late payment, but I'm afraid not to.

I believe this is a frivolous claim.

I can see where this could be one of those "middle of the fence" situations, but with your documentation I would agree these are frivolous claims.

Actually though, 623(a)(8) concerns the consumer's ability to dispute information directly with the "furnisher" (the Bank). The person in my example is filing the dispute directly with the credit reporting agency, who sends us their standardized form, we research the dispute and reply back to the CRA. So I'm assuming based on that, we just have to continue to respond each time? The rules for "frivolous and irrelevant disputes" from a consumer to a CRA are under 611(a)(3). Evidently, the CRA doesn't believe this consumer's disputes are frivolous because they continue to investigate each dispute by sending us a form requesting a response.

Am I correct?

But still......(F) has to do with a dispute filed directly to the Bank from the consumer. We have not received any such dispute. We received the consumer's dispute from the CRA. Do we respond to the CRA that we think the dispute is frivolous? We have to provide a response, do we not? There is no space or field on the CRA form for the Bank to respond that the dispute is frivolous. We would not be responding directly to the consumer, because we did not receive the dispute directly from the consumer. I do not see a possibility of sending a letter to the consumer....."don't file any more disputes with the CRA because we have determined that your disputes are frivolous."

The above gives you the ability to classify them (with proper documentation) as frivolous even with them being disputed through the CRA instead of directly to you. Inform the CRA that based on your documentation that you consider these frivolous disputes on your next response, or call your rep and discuss with them.

Here is a link to the proposed rules to implement the "direct disputes" provision of section 312 of the FACT Act: Rules

It contains a definition of "frivolous or irrelevant disputes" but remember that this is still a proposed rule and could change.