Does a lender have an obligation to investigate and document efforts to clear a fraud alert on a loan application that does not go on to closing? For instance, credit is pulled and a fraud alert is active (with or without a contact verification number). Credit is unacceptable so the loan is declined for delinquency or perhaps shortly after application the borrower asks to withdraw the application but the fraud alert has not yet been cleared.

I am not sure why a fraud alert would be treated much different from a address discrepancy. You would want to make sure you are dealing with the actual consumer and not a fraudster.


2. If the user plans to deny the consumer’s application to open a new account on the basis of information in a consumer report, must a user that receives a notice of address discrepancy take steps to establish a reasonable belief that the consumer report it has obtained relates to the consumer?

Yes. If a user plans to deny the consumer’s application based on a consumer report, the user must take steps to ensure that the consumer report on which it is relying pertains to the consumer.