CFPB Announces Settlement with Debt Collector for Credit Reporting Violations
We have been covering developments concerning litigation brought under the Fair Credit Reporting Act (“FCRA”). Well, entities regulated under the FCRA can also be subject to enforcement actions for failing to meet their statutory obligations. The Consumer Financial Protection Bureau (“CFPB”) last week announced a settlement with Afni, Inc. (“Afni”) to address violations the CFPB identified in Afni providing information to consumer reporting agencies (“CRAs”). Afni is an Illinois-based company that collects debt on behalf of several telecommunications companies and furnishes information to CRAs about consumers’ credit. The CFPB’s consent order requires Afni to take specified measures to prevent future FCRA violations and imposes a $500,000 civil money penalty.
Leading up to the consent order, the CFPB determined found that Afni furnished information to CRAs that it “knew or had reasonable cause to believe” was inaccurate. Additionally, the CFPB also determined that that Afni failed to conduct reasonable investigations of disputes made by consumers both to Afni and to CRAs about furnished information and failed to conduct investigations of disputes made to Afni in a timely manner. Moreover, Afnf failed to send required notices to consumers about the results of such investigations and failed to establish, implement, and update its policies and procedures regarding its furnishing of consumer information to CRAs. This conduct, as well as other actions described in the consent order, violated the FCRA and Reg V.
The consent order requires that Afni take remedial measures to improve and ensure the accuracy of its furnishing of consumer information to CRAs and its policies and procedures relating to credit reporting and dispute investigation. These required steps include:
On “at least a monthly basis,” review samples of account information to assess the accuracy and integrity of information Afni furnishes;
On “at least a monthly basis,” review samples of consumer disputes and responses to assess whether Afni’s handling of consumer disputes complies with FCRA, Reg V, and its own policies and procedures;
Retain (within 30 days of the consent order) independent consultants, with specialized experience and acceptable to the Regional Director for the Midwest Region for the Office of Supervision for the CFPB (“Regional Director”), to conduct an independent review of Afni’s activities, policies, and procedures relating to furnishing and credit reporting and within 180 days the independent consultants must prepare a written report of their findings;
Take other measures specified in the consent order; and
Pay a civil money penalty of $500,000.
Furnishing issues like these have been a staple of CFPB enforcement for years now. Companies that furnish data to credit bureaus should pay particular attention to data formats, an issue that the CFPB has flagged before, and that the CFPB is probably still on the lookout for. Using OSCAR is not a “set it and go” operation. Companies that furnish data to the bureaus need to monitor the information they’re providing, and check in to make sure that what they’re communicating using the automated formats is consistent with the underlying information.