When a consumer finds an error on his or her credit report, the FCRA provides two mechanisms for raising a dispute. The consumer can raise a “direct” dispute with the person or entity that furnished the incorrect or incomplete information (the “furnisher”), or an “indirect” dispute with the credit reporting agency, which then must provide notice of the dispute to the furnisher.
Under the statute, when a furnisher receives a direct dispute, it has a duty to investigate unless it reasonably deems the dispute is frivolous or irrelevant. And when a credit reporting agency receives an indirect dispute, it does not have to provide notice of the dispute to the furnisher if it reasonably finds the dispute is frivolous or irrelevant. But what if the credit reporting agency receives an indirect dispute, provides notice to the furnisher, and the furnisher decides the dispute is frivolous or irrelevant?
According to the Third Circuit, in a strong pro-consumer opinion today in the case of Ingram v. Experian, there is no frivolous or irrelevant exception to the duty to investigate in these circumstances. The statute, it held, only provides for the primary recipient of a dispute to have discretion not to investigate. The plaintiff’s position was supported by the CFPB and FTC in a joint amicus brief.