Investigating and Defending Identity Theft Claims Against Furnishers Under The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) was enacted to promote the accuracy, fairness, and privacy of information maintained by Consumer Reporting Agencies (CRAs).  In addition to imposing duties on the CRAs, it requires furnishers of information to provide accurate and complete information to the CRAs and to investigate any consumer disputes regarding the accuracy of that information.  Increased claims of identity theft by consumers have given rise to more disputes that accounts are not accurately being reported as belonging to those consumers.  These “identity theft” disputes put furnishers in a difficult position.  In order to investigate and respond to these disputes, furnishers must determine whether or not the consumer opened the account, and correspondingly, whether or not to change the reporting on it.

With the increasing number of FCRA identity theft claims, furnishers must be aware of their responsibilities under the statute, and in particular, investigate the dispute as thoroughly as reasonably possible. If the furnisher verifies the reporting as accurate to the CRA, and the consumer files suit, the furnisher, and its counsel should conduct an intensive review of the facts to determine whether or not the account does in fact belong to the consumer. The reasonableness of the investigation, and whether the consumer can establish that the account did not belong to the consumer, will be critical to defending the lawsuit.

To view the full legal alert on investigating and defending identity theft claims against furnishers under the FCRA, please click here.

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