borrower disputing info on credit report

I am having trouble with this one and my brain won't process where I need to go to find the answer.
We have a member who is disputing something on their credit report, not ID theft but a loan that has been paid off with us and it still shows outstanding. The member calls us, we tell them they have to go to E-Oscar (we are using E-Oscar now to handle all disputes) to dispute. Doesn't FACTA say somewhere that is they contact us directly we have to fix or is it ok to send them to E-Oscar and say it's out of our hands?

You're referring to section 312. However, the final regulation has not been issued. Until then you can continue referring disputes to the CRAs.

In addition, customers do not have access to E-Oscar, and never will. The CRA's will settle disputes as will data furnishers settle disputes through E-Oscar but customers don't have and will never have access to the system. Either the CRA or the company reporting must fix the error or decide the information is correct.

Thanks for the responses. I think we are doing something wrong. A member calls us and disputes something that we have been reporting on their credit report, we are telling them to call the credit reporting agency and tell the cra what is wrong, the cra will submit to us on E-Oscar, we will then fix. It seems to me that if we are reporting something wrong (paid off loan still showing a balance) we should take care of it and fix it but instead we are making our member contact the CRA (and we all know how easy that is!). What are other FI doing? Do you go ahead and fix or are you making your customer/member go to the CRA? Thanks

We fix this type of problem ourselves. Until 12/1 we did not have to use e-oscar and none have come up since. Pre 12/1 I simply called the local CRA rep and she told me what to do. I had to fax her somthing in writing and signed by me of course and she got it changed. Now that e-oscar is required I think I can still fix such a problem by going online, but have not had to do it yet. When this comes up I will call our local representative and I am sure she can walk me through the steps over the phone.

If you have E-Oscar, fix it yourselves using this valuable tool. We have done this all along. If it was your institutions mistake, it would be a horrible customer service issue if you made your member/customer try to fix it themselves. I think you recognized that all along.

Yes, I agree it's terrible customer service but these types of issues are handled through our collection department and they aren't the friendliest folks
I would like to return to the comment above that this type of discrepancy will be covered by sec 312. Once this regulation is issued will we need to adjust our procedure to handle these ourselves and stop pushing the customer off on the cra? What I was told by our compliance officer is that we signed up for E-Oscar to be in compliance with sec. 312(c). But I am definately questioning this because 312(c) is ability to dispute informaiton directly with the furnisher, not ability to dispute info directly with the furnisher and they say call the CRA. I know the final reg isn't out but if I could get a little more clarification from all of you I can go to compliance and collections with a better argument. Thanks

From Section 312:

(8) ABILITY OF CONSUMER TO DISPUTE INFORMATION DIRECTLY WITH FURNISHER —

`(A) IN GENERAL — The Federal banking agencies, the National Credit Union Administration, and the Commission shall jointly prescribe regulations that shall identify the circumstances under which a furnisher shall be required to reinvestigate a dispute concerning the accuracy of information contained in a consumer report on the consumer, based on a direct request of a consumer.

Until the final regs are issued we are not certain what type of disputes will be allowed directly with the "furnisher". It is speculated the disputes will be limited only to ones dealing with the specific "furnisher". But until we get the reg. we can't really "clarify" anything at this point (or at least I can't).

I would tread carefully if the complaint is legimate and the bank knows they are wrong. Federal courts have given consumers the right to sue data furnishers. Go to "court watch" and read the Johnson vs MBNA case where MBNA lost over $90K for failing to establish reasonable procedures to investigate a customer complaint.

Is anyone aware of the possible release date of 312? Also, I am trying to write procedures to handle customer disputes of information on a credit bureau. Does anyone have any procedures written that they are willing to share? Thanks!!!

I have an issue on the deposit side with a customer disputing a charge-off on their checking account. The situation involved fraud; however the customer did not notify the bank within the appropriate time frame. The bank reported it to the credit bureau but the customer wants it removed because he states the whole issue was a fraud issue. Should he be reporting this dispute to the CRA or should we handle it? This wouldn't be the type of dispute we would submit through e-Oscar would it? One person told us that they would just put a note on the credit record "due to fraud" but it would stay on the report.

If the customer has already proven to your satisfaction that the negative info you are reporting only occured due to fraud, you should correct it yourself by asking the credit bureaus(via E-Oscar) to delete any negative info that was caused by the fraudulent activity. Otherwise, you should refer them to the credit bureaus to initiate a dispute.

P.S. - Once final rules for FACT Act 312(c)are issued, you may be required to investigate a dispute such as this yourself.

I need to add a little to this situation, the fraud that the customer reported occurred in 2003 and he did not report it to us until late 2004. His reason was that his statements were going to a different address which is why he did not know about it until recently. The bank is concerned that if it removes this from the credit bureau it will not have a way to collect the charge-off from this customer. I'm going back to the security officer to ask if she is sure it was fraud, but do we have any recourse from this customer even if we remove the charged-off account from his credit report? Thank you.

Choosing not to report the account to a credit bureau does not mean you can't collect on an account.