Why Consumers are Unhappy with CRAs
There were so many knowledgeable speakers at the NAPBS Mid-Year Conference; it was hard to take it all in. I had to focus on a few specific topics or I would have been on information overload. The info below may not come as a surprise, but it is interesting to see it spelled out.
In my last blog post, I discussed the topic of "Are Consumers Unhappy with CRAs?". In this post, I will discuss the top 3 complaints that cause consumers to be unhappy.
Top Consumer complaints about CRAs:
Difficult dispute process
Accuracy -100% Accuracy in reporting is like a balanced budget- it is a nice idea, but we all know it will not happen. As long as we “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates”, we should be fine, right? Well, what exactly are “reasonable procedures”?
Although the term is mentioned throughout the FCRA (15 times), it does not go into detail as to what is considered “reasonable”. There are some specific steps listed that must be followed that we are all familiar with (types of disclosures, Adverse Action process, etc), and then there is that ambiguous term about “reasonable procedures”. Can you prove that you have QA processes in place to ensure accuracy? Is it audited periodically? Are you confident that your sources also have some type of QA process?
Report Interpretation – Are your reports user-friendly? Are they clear and concise? Can anyone interpret- regardless of their background? If you aren’t sure, it is time for a report review. Are you reporting the same charge multiple times? Are you indicating on your reports a “Possible match” on a criminal search (big no-no, by the way). There is current litigation indicating that even if a report is correct, it can still be misleading and impact an employment decision. How’s that for irony? You address the accuracy item and can still get bitten because your report is confusing. Don’t assume your clients know how to interpret reports.
Difficult Dispute Process – How easy is it for a consumer to open a dispute in regard to one of your reports? What if they don’t have the report in front of them? Is it indicated clearly on your website with a toll-free number? It has been suggested that you have the strongest members of your CS team on disputes. They have the opportunity to immediately diffuse the situation by listening to the consumer, informing them of the steps in the dispute process and following up with them along the way (while documenting every action and discussion). Transparency in this process shows the consumer that you are working in their best interests, and they are less likely to take out their frustrations in the courtroom.
If you don’t have a Compliance Department or in-house Legal Counsel, simply go through your process as if you were the consumer. Were you denied employment based on an inaccurate report? How is your organization set up to handle these types of situations? If you don’t currently have a well-documented process in place for any consumer interaction, that would be a great starting point.
I am not an attorney, but it would seem to me if we create, implement, audit and document any process in regard consumer interaction (from initial report to dispute closure), that would be considered a “reasonable procedure”. If in doubt, have an attorney review your process for defensibility. We all hate those attorney’s fees, but a review is much less costly than a defense.
FCRA statute of the day:
§ 615. Requirements on users of consumer reports [15 U.S.C. § 1681m]
(c) Reasonable procedures to assure compliance. No person shall be held liable for any violation of this section if he shows by a preponderance of the evidence that at the time of the alleged violation he maintained reasonable procedures to assure compliance with the provisions of this section.
In short, he who has the most papers (audit trail) wins (or at least dramatically reduces risk of losing a lawsuit).
Link back to our previous blog post: http://www.frssoftware.com/blog?n=28
Nichole Disser, Strategic Account Manager