Fair Credit Reporting Act

Efforts to Promote
Consumer Report
Accuracy and Disputes
A Report to Congress

Federal Trade Commission

2020

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I. INTRODUCTION

This report responds to Senate Report 116-111, the Appropriations Committee’s report
accompanying the Financial Services and General Government Appropriations Bill,
2020, directing the Federal Trade Commission (“Commission” or “FTC”) to report on “its
consumer education efforts with respect to disputing and correcting information in a
credit report, as well as its enforcement efforts related to dispute processes and the
correction of inaccurate and incomplete information.” 1 The Federal Trade Commission
appreciates this opportunity to provide this report.

Congress enacted the Fair Credit

Reporting Act 2 (“FCRA”) in 1970, Errors in consumer reports, however, can
recognizing the importance of “fair and cause consumers to be denied credit or
accurate credit reporting” to maintain other benefits or pay a higher price for
“the efficiency of the banking system” them. For this reason, accuracy of
and “the public[’]s confidence” in that
consumer reports is critically important.
system. 3 Consumer reports are reports
of information compiled on individual
consumers that are used or expected to be used to determine eligibility for credit,
insurance, employment, and other similar purposes. They often include consumer credit
histories or public record information, such as arrests, convictions, judgments, and
bankruptcies. These consumer reports are often used to evaluate the risk of future
nonpayment, default, or other adverse events. Errors in consumer reports, however,
can cause consumers to be denied credit or other benefits or pay a higher price for
them. For this reason, accuracy of consumer reports is critically important.

The FCRA imposes a number of obligations on those who compile and sell consumer
reports—consumer reporting agencies (“CRAs”)—regarding consumer report accuracy
and consumer disputes. CRAs must comply with requirements to help ensure the
accuracy of consumer reports, including requirements that CRAs (1) maintain
reasonable procedures to ensure the “maximum possible accuracy” of consumer
reports 4 and (2) maintain procedures through which consumers can dispute and correct
inaccurate information in their consumer reports. 5 In addition, the FCRA imposes
obligations on those who furnish information about consumers to CRAs (“furnishers”),
such as entities extending credit. For example, furnishers have a duty to establish and
implement reasonable written policies and procedures regarding the accuracy and
integrity of the information they report, report accurate information, and investigate

1
S. Rep. No. 116-111, at 72.
2
15 U.S.C. §§ 1681–1681x.
3
Id. § 1681(a).
4
Id. § 1681e(b).
5
Id. § 1681i(a)–(d)(1).

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consumer disputes of inaccurate information. 6 Users of consumer reports have

obligations under the statute as well. For example, if a user of a consumer report takes
an adverse action against a consumer—such as a denial of credit or employment—
based on information in a consumer report, the user must provide an adverse action
notice to the consumer, which explains how the consumer can obtain a free copy of the
report and dispute any inaccurate information in the report. 7

II. FTC ACTIVITIES TO PROMOTE CREDIT REPORT ACCURACY

The Commission has played a key role in the implementation, enforcement, and
interpretation of the FCRA since its enactment. 8 As the consumer reporting system
evolves and new technologies and business practices emerge, consumer and business
education concerning applicable rights and responsibilities under the FCRA, as well as
vigorous enforcement, continue to be top priorities for the Commission.

A. Consumer and Business Education

The FTC has a number of user-friendly resources for consumers designed to inform
them of their rights under the FCRA and assist them with navigating the consumer
reporting system, including the dispute process. The publication Credit and Your
Consumer Rights provides an overview of credit, explains consumers’ legal rights, and
offers practical tips to help solve credit problems. 9 Additionally, the publication Disputing
Errors on Credit Reports explains how consumers can obtain their credit report and
dispute inaccurate information, including sample dispute letters. 10 The FTC also has
publications that explain how consumers can obtain their free annual credit reports from
each of the nationwide consumer reporting agencies, 11 as well as navigate employment
background checks 12 and tenant background checks. 13 The Commission periodically

6
12 C.F.R. §§ 1022.42–.43; 15 U.S.C. § 1681s-2(a)–(b).
7
15 U.S.C. § 1681m(a). The adverse action notice also must include a statement that the CRA that
supplied the consumer report did not make the decision to take the adverse action and cannot give the
consumer any specific reasons for the decision. Id. § 1681m(a)(2)(B).
8
As enacted, the FCRA established the Commission as the primary federal enforcement agency, with
wide jurisdiction over entities involved in the consumer reporting system; the primary exceptions to the
Commission’s jurisdiction are federally regulated financial institutions. See 15 U.S.C. § 1681s(a)–(b).
Pursuant to the Consumer Financial Protection Act of 2010 (“CFPA”), Title X of Pub. L. No. 111-203, 124
Stat. 1955 (July 21, 2010) (The Dodd-Frank Wall Street Reform and Consumer Protection Act), the
Commission shares its FCRA enforcement role with the Consumer Financial Protection Bureau (“CFPB”)
in many respects.
9
Credit and Your Consumer Rights (June 2017), https://www.consumer.ftc.gov/articles/0070-credit-and-
your-consumer-rights.
10
Disputing Errors on Credit Reports (Feb. 2017), https://www.consumer.ftc.gov/articles/0151-disputing-
errors-credit-reports.
11
Free Credit Reports (Mar. 2013), https://www.consumer.ftc.gov/articles/0155-free-credit-reports.
12
Background Checks (Mar. 2018), https://www.consumer.ftc.gov/articles/0157-background-checks.
13
Renting an apartment? Be prepared for a background check (Nov. 2016),

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publishes blog posts reminding consumers about their rights and the FTC resources
available to assist them and continues to update and expand its materials as new
issues arise. For example, in January 2020, the FTC published a four-part blog series to
help consumers manage credit, including discussions of (1) why does your credit
matter; (2) getting your credit report; (3) reading your credit report; and (4) fixing your
credit report. 14

The Commission has also created a dedicated

website for identity theft victims, whose consumer IdentityTheft.gov is the federal
reports may be riddled with inaccurate information government’s one-stop resource
as a result of identity theft. IdentityTheft.gov is the for identity theft victims.
federal government’s one-stop resource for
identity theft victims. People can use
IdentityTheft.gov to report identity theft to the Federal Trade Commission and get a
step-by-step personal recovery plan. 15 The site also creates an Identity Theft Report
that victims can use to clear their credit files of fraudulent information resulting from the
identity theft. IdentityTheft.gov has detailed advice for more than 30 types of identity
theft and also is available in Spanish at RobodeIdentidad.gov. When people use
IdentityTheft.gov, their report becomes part of the Consumer Sentinel Network 16
database and is available to the Network’s law enforcement members.

In terms of business education, the FTC has published guidance for employment and
tenant background screening companies regarding their obligations under the FCRA,
including with respect to accuracy and consumer disputes. 17 For furnishers, the FTC
publication Consumer Reports: What Information Furnishers Need to Know provides an
overview of furnisher obligations under the FCRA. 18 Similarly, for users of consumer
reports, the FTC has published guidance for employers, landlords, insurers, and

https://www.consumer.ftc.gov/blog/2016/11/renting-apartment-be-prepared-background-check.
14
See, e.g., New year, new credit blog series (Jan. 2020),
https://www.consumer.ftc.gov/blog/2020/01/new-year-new-credit-blog-series.
15
Since the inception of IdentityTheft.gov on January 22, 2016 through February 17, 2020, the site has
received more than 1.9 million identity theft complaints from consumers.
16
The Consumer Sentinel Network provides law enforcement members with access to complaints
provided directly to the Federal Trade Commission by consumers, as well as providing members with
access to complaints shared by data contributors, such as governmental agencies and other
organizations.
17
See What Employment Background Screening Companies Need to Know About the Fair Credit
Reporting Act (Apr. 2016), https://www.ftc.gov/tips-advice/business-center/guidance/what-employment-
background-screening-companies-need-know-about; What Tenant Background Screening Companies
Need to Know About the Fair Credit Reporting Act (Oct. 2016), https://www.ftc.gov/tips-advice/business-
center/guidance/what-tenant-background-screening-companies-need-know-about-fair.
18
See Consumer Reports: What Information Furnishers Need to Know (Nov. 2016),
https://www.ftc.gov/tips-advice/business-center/guidance/consumer-reports-what-information-furnishers-
need-know.

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creditors describing their obligations under the FCRA, including providing adverse
action notices to consumers. 19

Finally, each time it announces a new law enforcement action, the FTC typically
publishes consumer and business blog posts describing the case and discussing
lessons learned for businesses and consumers. For example, along with the
announcement of a settlement with tenant background screening company RealPage, 20
the Commission published a consumer blog post for consumers seeking housing and a
business blog post with guidance for background screening companies. 21

Appendix A contains a more comprehensive list of the FTC’s consumer publications on

disputing and correcting information in consumer reports.

B. Law Enforcement
In the last decade, the Commission has brought more than 30 actions to enforce the
FCRA against CRAs, users of consumer reports, and furnishers of information to CRAs.
Approximately half of those cases involve allegations related to processes for handling
consumer disputes of inaccurate information or procedures for ensuring the accuracy of
information in consumer reports. With the advent in 2011 of the CFPB’s supervisory
authority over the nationwide consumer reporting agencies and the coordination efforts
between the federal agencies, the FTC has focused its FCRA law enforcement efforts
on other entities in the credit reporting area and other aspects of the consumer reporting
industry more broadly.

For example, the FTC settled cases against furnishers that allegedly had inadequate
policies and procedures for reporting accurate credit information to CRAs and handling
consumer disputes. In Credit Protection Association, LP, the Commission alleged that a
debt collector failed to have adequate policies and procedures to handle consumer
disputes, did not have a policy requiring notice to consumers of the outcomes of
investigations about disputed information, and in numerous instances failed to inform

19
See Consumer Reports: What Employers Need to Know (Oct. 2016),
https://www.ftc.gov/tipsadvice/business-center/guidance/using-consumer-reports-what-employers-need-
know; Consumer Reports: What Landlords Need to Know (Oct. 2016), https://www.ftc.gov/tips-
advice/business-center/guidance/usingconsumer-reports-what-landlords-need-know; Consumer Reports:
What Insurers Need to Know (Nov. 2016), https://www.ftc.gov/tips-advice/business-
center/guidance/consumer-reports-what-insurers-need-know; Using Consumer Reports for Credit
Decisions: What to Know About Adverse Action and Risk-Based Pricing Notices (Nov. 2016),
https://www.ftc.gov/tips-advice/business-center/guidance/using-consumer-reports-credit-decisions-what-
know-about-adverse.
20
FTC v. RealPage, Inc, No. 3:18-cv-02737-N (N.D. Tex. filed Oct. 16, 2018),
https://www.ftc.gov/enforcement/cases-proceedings/152-3059/realpage-inc.
21
See, e.g., Will background check errors deny you a home? (Oct. 2018),
https://www.consumer.ftc.gov/blog/2018/10/will-background-check-errors-deny-you-home; $3 million
FCRA settlement puts tenant background screening at the forefront (Oct. 2018),
https://www.ftc.gov/news-events/blogs/business-blog/2018/10/3-million-fcra-settlement-puts-tenant-
background-screening.

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consumers of the outcome of disputes. 22 The settlement included $72,000 in civil

penalties. In Tricolor Auto Acceptance, LLC, the Commission alleged that the loan
servicing department of an auto dealer failed to have written policies and procedures
designed to ensure that the credit information it reported to CRAs was accurate and
failed to properly investigate consumer disputes regarding the accuracy of credit
information. 23 The settlement included $82,000 in civil penalties.

As to the CRAs themselves, the FTC has settled cases against background screening
CRAs that compile background reports on consumers that may include driving records,
employment and education history, eviction records, criminal records, and credit history
for use in making employment and housing decisions. These settlements include
allegations relating to inaccuracies in consumer reports. For example, in RealPage, Inc.,
the Commission alleged that a tenant background screening CRA failed to have
reasonable procedures to ensure the maximum possible accuracy of consumer report
information and associated some potential renters with criminal records that did not
belong to them. 24 The settlement included $3 million in civil penalties. In InfoTrack
Information Services, Inc., the Commission alleged that an employment background
screening CRA failed to have reasonable procedures to ensure the maximum possible
accuracy of consumer report information and, as a result, provided inaccurate
information suggesting that job applicants potentially were registered sex offenders. 25
The settlement included $1 million in civil penalties, which was suspended upon
payment of $60,000 based on inability to pay.

The FTC has also brought cases against check authorization CRAs for failing to comply
with their accuracy obligations. Check authorization companies compile consumers’
personal information and use it to help retail merchants throughout the United States
determine whether to accept consumers’ checks. In its settlements with Telecheck 26
and Certegy, 27 two of the nation’s largest check authorization companies, the
Commission charged these companies with failing to follow FCRA accuracy procedures,
failing to follow proper procedures for consumer disputes, and failing to establish and
implement reasonable written policies regarding the accuracy of information the
companies furnish to other CRAs.

22
United States v. Credit Prot. Ass’n, LP, No. 3:16-cv-01255-D (N.D. Tex. filed May 9, 2016),
https://www.ftc.gov/enforcement/cases-proceedings/142-3142/credit-protection-association.
23
United States v. Tricolor Auto Acceptance, LLC, No. 3:15-cv-3002 (N.D. Tex. filed Sept. 16, 2015),
https://www.ftc.gov/enforcement/cases-proceedings/142-3073/tricolor-auto-acceptance-llc.
24
FTC v. RealPage, Inc, No. 3:18-cv-02737-N (N.D. Tex. filed Oct. 16, 2018),
https://www.ftc.gov/enforcement/cases-proceedings/152-3059/realpage-inc.
25
United States v. Infotrack Info. Servs., Inc., No. 1:14-cv-02054 (N.D. Ill. filed Apr. 9, 2014),
https://www.ftc.gov/enforcement/cases-proceedings/122-3092/infotrack-information-services-inc-et-al.
26
United States v. TeleCheck Servs., Inc., No. 1:14-cv-00062 (D.D.C. filed Jan. 16, 2014),
https://www.ftc.gov/enforcement/cases-proceedings/112-3183/telecheck-services-inc.
27
United States v. Certegy Servs., Inc., No. 1:13-cv-01247 (D.D.C. filed Aug. 15, 2013),
https://www.ftc.gov/enforcement/cases-proceedings/112-3183/telecheck-services-inc.

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The FTC obtained $3.5 million in civil

penalties against each company. In the last decade, the Commission has
brought more than 30 actions to enforce the
A full list of the Commission’s law FCRA against consumer reporting agencies
enforcement actions regarding (“CRAs”), users of consumer reports, and
consumer report accuracy in the last furnishers of information to CRAs.
decade appears in Appendix B.

III. CONCLUSION

The FTC continues to look for education and enforcement opportunities around the
issue of consumer report accuracy and disputes. Indeed, last December, the
Commission hosted a public workshop, jointly with the CFPB, regarding issues affecting
the accuracy of both traditional credit reports and employment and tenant background
screening reports. 28 The December workshop brought together stakeholders—including
industry representatives, consumer advocates, and regulators—for a wide-ranging
public discussion on the many issues that affect the accuracy of consumer reports. The
Commission’s goal in co-hosting this workshop was to further educate itself on recent
trends in consumer reporting accuracy, 29 including (1) current practices of furnishers of
information and compliance with accuracy requirements; (2) current accuracy topics for
traditional credit reporting agencies; (3) accuracy considerations for background
screening; and (4) navigating the dispute process. The agencies solicited public
comments before and after the workshop, and the workshop record will assist the
Commission in targeting its education and enforcement efforts in this area in the future.

Thank you for the opportunity to provide the Commission’s report on credit report
accuracy and consumer disputes. We look forward to continuing to work with Congress
and this Committee on these important issues.

28
See Accuracy in Consumer Reporting, An FTC/CFPB Workshop (Dec. 2019),
https://www.ftc.gov/news-events/events-calendar/accuracy-consumer-reporting-workshop.
29
In 2012, the FTC published a congressionally mandated study that examined the accuracy of credit
reports from the three nationwide consumer reporting agencies. Section 319 of the Fair and Accurate
Credit Transactions Act of 2003: Fifth Interim Federal Trade Commission Report to Congress Concerning
the Accuracy of Information in Credit Reports (Dec. 2012), https://www.ftc.gov/reports/section-319-fair-
accurate-credit-transactions-act-2003-fifth-interim-federal-trade.

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Appendix A: Selected FTC Consumer Education Resources on

Disputing and Correcting Information in Consumer Reports

1. Understanding Your Credit (Jan. 2020),

https://www.consumer.ftc.gov/articles/understanding-your-credit.

2. Credit repair: Fixing Mistakes on Your Credit Report (Jan. 2020),

https://www.consumer.ftc.gov/blog/2020/01/credit-repair-fixing-mistakes-your-
credit-report.

3. Fixing Your Credit (Mar. 2018), https://www.consumer.ftc.gov/articles/fixing-your-

credit.

4. Background Checks (Mar. 2018), https://www.consumer.ftc.gov/articles/0157-

background-checks.

5. Credit and Your Consumer Rights (Jun. 2017),

https://www.consumer.ftc.gov/articles/0070-credit-and-your-consumer-rights.

6. Disputing Errors on Credit Reports (Feb. 2017),

https://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports.

7. Renting an apartment? Be prepared for a background check (Nov. 2016),

https://www.consumer.ftc.gov/blog/2016/11/renting-apartment-be-prepared-
background-check.

8. Sample Letter for Disputing Errors on Your Credit Report with Information
Providers (Feb. 2014), https://www.consumer.ftc.gov/articles/0485-sample-letter-
disputing-errors-your-credit-report-information-providers.

9. Sample Letter for Disputing Errors on Your Credit Report (Aug. 2013),
https://www.consumer.ftc.gov/articles/0384-sample-letter-disputing-errors-your-
credit-report.

10. Free Credit Reports (Mar. 2013), https://www.consumer.ftc.gov/articles/0155-free-

credit-reports.

11. Credit Repair: How to Help Yourself (Nov. 2012),

https://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself.

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Appendix B: FTC Actions Since 2010 Alleging Violations of the

FCRA’s Dispute and/or Accuracy Provisions

1. FTC v. Real Page, Inc., No. 3:18-cv-02737-N (N.D. Tex. filed Oct. 16, 2018),
https://www.ftc.gov/enforcement/cases-proceedings/152-3059/realpage-inc.

2. United States v. Credit Prot. Ass’n, LP, No. 3:16-cv-01255-D (N.D. Tex. filed May
9, 2016), https://www.ftc.gov/enforcement/cases-proceedings/142-3142/credit-
protection-association.

3. United States v. Tricolor Auto Acceptance, LLC, No. 3:15-cv-3002 (N.D. Tex.
filed Sept. 16, 2015), https://www.ftc.gov/enforcement/cases-proceedings/142-
3073/tricolor-auto-acceptance-llc.

4. United States v. TeleCheck Servs., Inc., No. 1:14-cv-00062 (D.D.C. filed Jan. 16,
2014), https://www.ftc.gov/enforcement/cases-proceedings/112-3183/telecheck-
services-inc.

5. United States v. Infotrack Info. Servs., Inc., No. 1:14-cv-02054 (N.D. Ill. filed Apr.
9, 2014), https://www.ftc.gov/enforcement/cases-proceedings/122-
3092/infotrack-information-services-inc-et-al.

6. United States v. Instant Checkmate, Inc., No. 3:14-cv-00675-H-JMA (S.D. Cal.

filed Apr. 9, 2014), https://www.ftc.gov/enforcement/cases-proceedings/122-
3221/instant-checkmate-inc.

7. United States v. Consumer Portfolio Servs., Inc., No. 8:14-cv-00819-ABC-RNB

(C.D. Cal. filed May 28, 2014), https://www.ftc.gov/enforcement/cases-
proceedings/112-3010/consumer-portfolio-services-inc.

8. United States v. Certegy Servs., Inc., No. 1:13-cv-01247 (D.D.C. filed Aug. 15,
2013), https://www.ftc.gov/enforcement/cases-proceedings/112-3183/telecheck-
services-inc.

9. In the Matter of Filquarian Publ’g, LLC; Choice Level, LLC and Joshua Linsk,
FTC Matter No. 112 3195 (May 1, 2013), https://www.ftc.gov/enforcement/cases-
proceedings/112-3195/filiquarian-publishing-llc-choice-level-llc-joshua-linsk.

10. United States v. Spokeo, Inc., No. 2:12-cv-05001-MMM-SH (C.D. Cal. filed June
7, 2012), https://www.ftc.gov/enforcement/cases-proceedings/1023163/spokeo-
inc.

11. United States v. HireRight Sols., Inc., No. 1:12-cv-01313 (D.D.C. filed Aug. 8,
2012), https://www.ftc.gov/enforcement/cases-proceedings/102-313/hireright-
solutions-inc.

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12. United States v. Asset Acceptance, LLC, No. 8:12-cv-00182-JDW-EAJ (M.D. Fla.
filed Jan. 30, 2012), https://www.ftc.gov/enforcement/cases-proceedings/052-
3133/asset-acceptance-llc.

13. United States v. Credit Bureau Collection Servs., Larry Ebert, and Brian Striker,
No. 2:10-cv-00169-ALM –NMK (S.D. Ohio filed February 24, 2010),
https://www.ftc.gov/enforcement/cases-proceedings/062-3226/credit-bureau-
collection-services.

14. United States v. First Advantage SafeRent, Inc., No. 8:10-cv-00090-PJM (D. Md.
filed Jan. 14, 2010), https://www.ftc.gov/enforcement/cases-proceedings/082-
3016/first-advantage-saferent-inc-et-al-usa-ftc.

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Federal Trade Commission
ftc.gov

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