Collector - May 2020 - 21

"Credit reporting is fraught with potential liability
even in the best of times, and this is certainly not
the best of times right now."
"Unfortunately, while being more focused
on your credit is a good thing for consumers,
it can lead to them thinking things like:
'Well, I don't like how you are doing that,'"
she said. "Even if what you are doing is
completely legal-if the consumer doesn't
like it, they can sue."
Anthony pointed out that the FCRA can be
appealing to the plaintiffs' bar because it has
no cap on liability and defendants may have
to pay statutory damages, actual damages,
punitive damages, lawsuit costs and attorney
fees-a reason many businesses may be
inclined to settle even speculative claims.
"Under the FDCPA, in a class-action your
liability is capped at 1% of your net worth or
$500,000, whichever is lower," Anthony said.
"There is no such limitation on FCRA suits.
I've had cases where my client's exposure was
100 times its net worth."
In addition to private litigators, the CFPB
has also homed in on how data furnishers
comply with the FCRA. In 2014, the CFPB
started requiring major CRAs to submit
regular accuracy reports as part of ongoing
examinations, detailing the industries
and furnishers that receive the most
consumer disputes.
FCRA issues regularly pop up in the
bureau's Supervisory Highlights publications,
where examiners have noted concerns
about how companies investigate and report
disputes, train employees who oversee
furnishing and develop written policies
and procedures regarding the accuracy and
integrity of information reported to CRAs.
Some of these concerns were also in the
spotlight at the credit reporting workshop
hosted by the FTC and CFPB in December
2019. Two ACA members-LaDonna
Bohling, IFCCE, chief compliance officer at
Receivable Solutions Inc., and Leslie Bender,
IFCCE, CCCO, chief strategy officer and

COLLECTOR 05.20

General Counsel at BCA Financial Services
Inc.-participated in panels at the workshop,
which covered issues like accuracy in credit
reporting and the dispute process.

GRAPPLING WITH: THE CARES
ACT & CORONAVIRUS PANDEMIC
The CARES Act amends the FCRA with
new reporting requirements. While it does
not require lenders to offer any relief or
accommodation to consumers impacted by
the pandemic, it does indicate how to report
those accommodations if offered.
Current loans must continue to be
reported as current and delinquent loans
are permitted to be reported as delinquent,
Phan said, but the level of delinquency must
be maintained during the delinquency-for
example, freezing someone at "30-days past
due" throughout the accommodation.
The CARES Act doesn't define or limit
the types of accommodations financial
institutions may want to offer borrowers
facing financial hardships due to the
coronavirus, but this could include things
like payment plans, deferrals, forbearances,
loan modifications and fee waivers.
In a webinar hosted by ACA in April,
Phan encouraged companies that are
developing accommodations to make
sure they are properly documenting those
policies and procedures and how they will be
implementing them.
"This is something that's going to
be absolutely critical with regards to
regulator oversight if there are issues
with how you are communicating
accommodations to consumers, especially
if there is inconsistent criteria about
how you are extending or offering these
accommodations," Phan said. "These are
all things you want to make sure you are
documenting and applying consistently."

The CARES Act doesn't extend the 30day timeline for dispute responses, but the
CFPB has acknowledged that lenders and
credit bureaus are experiencing staffing and
resource constraints due to the pandemic.
The bureau's statement provides flexibility
for lenders and credit bureaus in the time
they take to investigate disputes. The FCRA
generally requires that consumer reporting
agencies and furnishers investigate disputes
within 30 days of receipt of the consumer's
dispute. The 30-day period may be extended
to 45 days if the consumer provides
additional information that is relevant to the
investigation during the 30-day period.
"Credit reporting is fraught with potential
liability even in the best of times, and this
is certainly not the best of times right
now," Phan said. "Companies are working
understaffed, call centers are down, and
customer support teams are working from
home and may not have access to some of
the information they would normally have
access to in order to respond to certain types
of disputes and inquiries."
The CFPB stated that it does not intend
to cite in an examination or bring an
enforcement action against firms that exceed
the FCRA's deadlines to investigate disputes
as long as they make good faith efforts
during the pandemic to do so as quickly as
possible.
"Consult with your counsel to make sure
what you are doing is as close to compliant
with the law as possible," Phan urged.
"Examiners are not going to criticize efforts
by companies who are doing the best they
can to work with consumers, but their
statement is not a promise that they won't
bring heavy scrutiny once this is all over."
Even if the CFPB decides not to act, that's
no protection from consumers filing FCRA
lawsuits if companies are unable to comply
with their legal obligations.
Companies may also be confused about
how to code accounts impacted by the
coronavirus pandemic. There is no specific
Metro 2 code for coronavirus issues.
Francis Creighton, president and CEO of
the Consumer Data Industry Association
(CDIA), which represents consumer

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Collector - May 2020

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