An audit of account relationships disclosed that our bank has been reporting a customer to the credit reporting agencies in connection with an Overdraft LOC as a secondary owner of the account when, in fact, the individual should not have been associated with this account.

Understanding that prompt cessation of reporting is required, what further action should be taken? Do we have a legitimate purpose for obtaining a credit report on the individual for investigative purposes? Should we notify the agencies that information should not have been reported by our bank for the period of time involved for this consumer?

You are correct that you have an obligation to stop reporting the wrong information immediately.

611 of the FCRA addresses the correction process for disputed information, but this is from the consumer's perspective/notice.

I don't believe you have the right to review the consumer's report at this time. You could notify the credit reporting agencies of the error and allow them to either correct it or investigate it. They could also ignore it until it becomes a disputed item from the consumer, as could you.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Andy is correct in his belief that you have no right to review a credit report for this purpose.

I would strongly recommend reporting the inaccuracy to both the credit reporting agency and to your customer.

I appreciate that your customer is unlikely to be overjoyed by this news but he/she will at least (and I hope with your support) have an opportunity to do something about this at a point when -hopefully- the problem is not time critical.

If your customer first finds out about this when they want to move home, for instance, and your inaccurate reporting leaves them disadvantaged and they find that actually you knew of the problem months or even years before they are going to be very disgruntled and rightly so. In addition by promptly notifying them of the problem you can at least show that you monitor your systems for error and not just leave this as an oversight which happens - however much later- to have corrected itself.

Unpleasant as the prospect might be pick up the phone and call your client.

Matthew
Compliance Officers Association, Privacy Officers Association, AACFE, MICM, SHRM.

Matthew brings up a good point about the notifying the customer. I was assuming you were reporting an available line. I don't see that as worth it because it would be corrected the next time you report.

But, if there are negative reports due to the history, you need to bite the bullet and tell the customer, as a courtesy. If they find out otherwise, they can still correct it but they'll be more upset at you then, than if you told them now.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.