February 5, 2011
The Fair Credit Reporting Act: Very Important Information For Companies
The Fair Credit Reporting Act affects all businesses. Businesses are required by the FTC to report only accurate information regarding the debts owned to the business by debtors. Businesses responsible for handling in house debt collections needs to understand The Fair Credit Reporting Act.
Companies that fail to heed these laws could be risking costly fines. In some cases, debts owed to them could be discharged. Debt collection can be a difficult process, but it is very important for any business handling debt collections to fully understand this law.
The Fair Credit Reporting Act
The Fair Credit Reporting Act states that consumers have rights concerning the accuracy of credit information about them contained in their credit report. It also states that businesses are responsible for the accuracy of the information contained in these reports to the best of their ability. It is important that businesses understand how this impacts debt collection.
In the event your business receives a complaint from one of the credit bureaus (TransUnion, Experian or Equifax), you then have a 30-day period to verify that the debt owed is valid, or it has to be removed from the individual’s credit report, according to The Fair Credit Reporting Act.
In regards to debt collection, The Fair Credit Reporting Act is crucial to understand. If you file an inaccurate claim, you face possible legal ramifications if done so intentionally. Moreover, The FTC can possibly limit your abilities to file future claims.
The Fair Credit Reporting Act does work on behalf of your business though. As long as the debt collection is accurate, it should be utilized by the business to ensure that other businesses know that this individual failed to make payment. Any business will want to know what to expect from a potential debtor before working with them.
Some Important Facts
For any business responsible for debt collection, much needs to be known about The Fair Credit Reporting Act. If they provide consumer information to the credit reporting agencies, they are also responsible for submitting only accurate information. These laws have been recently updated to expand the rights of consumers.
Consumers have the right to know what is contained in their credit report. They can file a request with the credit reporting agencies. During that process, if it contains any information deemed inaccurate, such as missing or wrong account information, debt collection activity, or erroneous history, the business has to offer proof of the accuracy of the debt, or it has to be removed from the credit report. The Fair Credit Reporting Act places this burden of proof on the business claiming the owed debt.
Negative, but accurate, information can remain on one’s credit report up to seven years. Bankruptcies can stay on up to ten years. Criminal convictions, or information related to employment applications for jobs with salaries over $75,000 can remain even longer.
Also, explore more important facts and resources about debt collection laws, in addition to collection agencies options.
Filed under Finance by
