Collector - September 2016 - (Page 44)
To Delete or Not to Delete?
Debt collectors sometimes ask whether it's permissible to delete information
from a consumer's credit report. The short answer is: it depends
on why you're deleting the information.
By Andrew Pavlik
here are various reasons why
debt collectors may wish to
delete certain information that
they previously reported to a consumer
reporting agency, aside from the reported
information being inaccurate, incomplete
or unverifiable (in which case the furnisher
must delete the information).
Sometimes consumers may request
deletion of unfavorable information
in exchange for payment of the debt.
Consumers may also repeatedly dispute
debts after they have been paid in hopes
that the furnisher will delete the negative
item, rather than respond to the continuous
disputes. It may be tempting to delete
reports under these circumstances;
however, there are reasons to approach such
practices with caution.
The Fair Credit Reporting Act and
Regulation V require furnishers and CRAs
to delete information that is inaccurate,
incomplete or unverifiable. The requirements
do not specifically address the deletion of
accurate information from a consumer
report. However, the FCRA requires
information to be reported "accurately."
Some argue that information in a
consumer report that is accurate and within
the applicable reporting period (generally
seven years for debts) should remain a part
of the consumer's credit history because
the deletion of the accurate information
amounts to an inaccuracy, which may
violate the FCRA. The deletion of accurate
information also potentially weakens the
accuracy and integrity of the overall credit
reporting process, making it more difficult
for lenders to make informed decisions
when granting credit to consumers.
The Consumer Financial Protection
Bureau has expressed concern with the
practice of furnishers simply deleting
disputed information instead of conducting
an investigation of the disputed information.
In Compliance Bulletin 2014-04, the CFPB
reminded furnishers of their obligation
under the FCRA and Regulation V to
investigate disputed information in a
The bulletin stated that investigations
of disputes are important because they
provide a critical check on the accuracy of
furnished items by prompting a furnisher to
reconsider information that a consumer has
identified as incorrect.
These investigations may help a furnisher
identify problems with the general accuracy
of the information that it furnishes to
consumer reporting agencies. For example,
the CFPB suggested that investigating
disputes may help furnishers to learn of a
systemic problem, thereby benefiting the
consumer who raised the dispute as well as
other similarly situated consumers who did
not submit disputes.
The deletion of accurate credit
information may also violate the terms
of a furnisher's agreement with a CRA.
The METRO II Consumer Reporting
Resource Guide, which is published by
the Consumer Data Industry Association,
conspicuously states: "Do not delete paid
in full collection accounts."
That said, there are circumstances where
deletion is appropriate or even required.
The Metro II Guide states the following
acceptable reasons for deletion of a report:
* Accounts that have been forwarded or
sold to another entity.
* Accounts that have been canceled or
retuned to the creditor.
* Accounts reported in error.
* Accounts that have been confirmed as
Additionally, the CRAs are instituting new
reporting requirements that require certain
medical debts to be deleted if the accounts
have been paid for, or are being paid by
When establishing policies for the
deletion of information from consumer
reports, collectors should consider applicable
law, the guidance of the CFPB, furnisher
agreements with CRAs and any specific
polices the CRA(s) may have on the deletion
of information. For more information on
the CFPB's Compliance Bulletin and other
information on the CFPB, association
members can access ACA International's
CFPB Resource Center at acainternational.
Andrew Pavlik is ACA International's senior
Table of Contents for the Digital Edition of Collector - September 2016
5 Ways to Get Electronic Payments Right
Making the Connection
Curious About Amicus Curiae?
Know the Score
What Creditors Need to Know About the TCPA
ACA Industry Advancement Support Helps Secure Victory for Collection Industry in FDCPA Case
Collector - September 2016