Federal Deposit
Insurance Corporation

To Whom It May Concern:

I wanted to express my concerns regarding the proposed rules change to the Fact Act Section 312.

Consumers have no control on the information that is submitted about them to the Credit Bureaus. The Laws put into effect are to protect consumers. If restrictions are placed upon their rights to dispute, it could have grave consequences. Yes, the Credit Bureaus do incur costs to investigate the disputes they receive. I also do not contest that there is a significant increase in reported disputes now that consumers have been given the right to a free credit report. With all the news coverage and publications now readily available to consumers, they understand how important annual reviews are. In our Technological age, it is easier than ever to have your identity stolen. It was the Credit Bureaus decision to compile and maintain the records as their line of business. They also need to accept the responsibility to correct mistakes.

I feel that if they are having problems with the cost and management of the number of disputes then logic says you should look at what is causing them. The average consumer report will contain multiple mistakes. The mistakes can enable identity theft or hurt a consumer's credit score. We live in a time where the information contained in the report has so much power over every aspect of our lives, from being able to rent or purchase a home, to employment. I also admit that there are some people that will try to abuse the system for their own advantage, but you cannot allow this to stop rightful disputes being submitted. The credit bureaus are given the right to refuse to dispute if they feel it's frivolous as long as they notify the customer of such decision in writing.

Looking at the broader picture, the problems that are contained in a credit report not only have an impact on the Credit Bureau and the Furnishers, but also have an impact on the Federal agencies, and our court systems.

The dispute process is a joke. The companies are relying on an automated system, which they use information already in the report to validate a debt. The laws say that they are to contact the company directly, and specifically question the information disputed. From what I have heard and seen myself, this is not happening. Some use the Metro 2 system, which I believe to be the cause of many common mistakes. If you call a company to try to resolve the issue personally rather than the auto dispute with the credit bureaus it is just as frustrating. Most company representatives have no knowledge of the metro 2 system, or how it works, or any way to fix the issue.

Since most disputes are usually verified no matter how many mistakes are listed due to the reliance on this broken system, reinvestigations are the only way to continue the battle to fix problems. Even after several disputes, with the companies and the credit bureaus often consumers are faced with taking the company to court to get a resolution or they will just give up thinking it will never be corrected.

Resolving all the underlying issues will alleviate the cost involved with multiple investigations and the burden put on consumers, the credit bureaus, federal agencies and our already over burdened court system. Here are the suggestions I think that would help resolve this problem:

Ø Revise the Metro 2 and all automated systems to fully comply with reporting requirements, including but not limited to:

1- Adding system checks that alleviate the most common reporting mistakes made. (Ie if missing pertinent information such as credit line the system rejects reporting until that is provided, and account status and company type match or its rejected, for example a collection agency cannot report an account as an installment account, and it must be recorded as a collection account).

2- Revising the acceptable field entries so that companies do not have to assign account portfolio types or statuses that are misleading (such as making adding a portfolio type for collection accounts among other needed revisions).

Ø Make the laws clearer to identify what is required for validation to comply applicable case law. Many consumers are misled by unscrupulous Collection agencies by misquoting case laws. Many multiple disputes often revolve around disagreements as to what is required.

Ø Make it mandatory that if a company cannot properly validate and account they must remove it from record. Under the current laws, if a company cannot prove the account they are only required to stop collection activities when the consumer notifies them outside the 30 day initial dispute period. Often consumers are made aware of problems by seeing a credit report. Since the company doesn't have to prove they mailed a notice, they often claim it was mailed out when the account was listed whether or not the consumer actually received notice of the account and the proper notice of their right to dispute it. If this is claimed, the listing on the credit report is allowed to remain, which impacts the consumer's credit score. The laws rightfully allow a person to dispute that the accounts that they do not believe belong on their record. It is hard to prove it's not your account. The burden should be on them to prove it is or they should have to remove the account from record. If the company can properly validate the account, then their will be no question of if they money is owed, and if the listing should remain even if they were made aware of by seeing a credit report and not getting the required letter. I many other industries the companies are forced to keep records for multiple years, and tax laws also support them having documentation supporting the accounts. Why is this information not kept by companies? They just don't hand out loans and credit cards; you always have to sign something. You can't even bee seen by the doctor without signing in, so why can't they keep records to support claims?

From what I have read and seen these types of changes are desperately needed and if put into action the number of multiple disputes, consumer complaints and court cases would be drastically reduced.

I thank you for the opportunity to express my views and concerns on this matter. If you would like further information please contact me at the above address.

Sincerely,

Julia Casey