Downto0

Can you use the 623 method to dispute impermissible purpose?

Recommended Posts

I have a JDB making inquiries for account review, not for collections. I don't think that there is permissible purpose for JDB's to do account reviews. In addition, this JDB sued me in court and lost due to no assignment. I don't think they even have pp for collections.

I'm guessing that my next step should be to contact the CRA itself under 611 and the JDB under 623 and dispute the inquiries but the first question that comes to mind is whether I can even dispute inquiries. The inquiries are soft and don't affect my credit score but it is still inaccurate that the JDB tells the CRA that they have permissible purpose for account review.

At this point I think I will basically draft up a permissible purpose letter and send one to the JDB and one to the CRA with no references to either 611 or 623. I just don't know if either of them, by law, have to answer because the dispute I have is not about information contained in the report itself...just permissible purpose for the inquiries.

Has anyone disputed inquiries, hard or soft?

Link to post
Share on other sites

Dismissal without prejudice. The judge said that they could refile when they had assignment.

I know what you may be getting at. The JDB may be able to purchase the proper assignment to establish ownership so having a case dismissed does not establish that they don't have assignment, just that they did not want to pay for the paperwork from the OC.

I don't think it matters as far as inquiries go. The analogy I like to use is where you have a driver's license but forget it. A cop stops you and asks for your driver's license. It doesn't matter that you actually have a driver's license, you can still get a ticket for not having it on your person when driving. Another example is your insurance card. If you don't have it in the vehicle, you get a ticket. You also may have to park your car and walk home.

The same when the JDB went to court. They did not have assignment and they had to walk home.

Amerikaner, I don't read in the FCRA where a consumer must first dispute with the CRA's before disputing with a data furnisher. In fact, most consumers do include a dispute in their dv letters to the collectors (data furnishers). In fact, it is a violation of the FCRA if the collector does not list the tl as disputed albeit the consumer does not have private right of action under these conditions.

The way I read it, a consumer uses 623 to dispute with the collector and 611 to dispute to the CRA. Here is the section of 623 which gives the consumer the right to dispute with the data furnisher:

(D) Submitting a notice of dispute- A consumer who seeks to dispute the

accuracy of information shall provide a dispute notice directly to such

person at the address specified by the person for such notices that--

(i) identifies the specific information that is being disputed;

(ii) explains the basis for the dispute; and

(iii) includes all supporting documentation required by the furnisher to

substantiate the basis of the dispute.

I underlined "specified information" because this is what a consumer can dispute. The specified information I want to dispute is the information that the JDB is able to pull my cr under account review. The JDB gave that information to the CRA and me. It is incorrect information which makes my cr inaccurate.

Then, here is where a consumer can dispute with the CRA:

§ 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i]

(a) Reinvestigations of Disputed Information

(1) Reinvestigation Required

(A) In general. Subject to subsection (f), if the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.

The way I read it, a consumer can dispute "any" item of information. What source do you have which states that inquiries cannot be disputed? And what other ways are there to dispute inquires?

The problem is that the FCRA, FDCPA, and TCPA are sometimes either vague or silent as to the specifics and generally leave it to the courts and the FTC to figure out the details. Do you have any FTC opinions or case law? I don't have anything myself but I will be sure to post anything I find in my research in this matter.

Link to post
Share on other sites

You can dispute directly, but you can not sue them for a violation UNLESS you have first disputed with the CRAs. That section of the law is written very badly, but there is a good article on this site at: Disputing With Original Creditor - 623 Method, Request Investigation, Remove Negative Information

Link to post
Share on other sites

Thanks kent. I read that article but I didn't really get anything out of it that I hadn't read already in other places. You actually explained more to me in your first sentence.

I kept hearing that you had to dispute to the CRA's first but I thought there was a procedural method to make the dispute valid. Now I understand that I can dispute with either the CRA or data furnisher (collector) but, to have private right of action, I would need to have disputed with the CRA.

So, I can dispute the inquiries because the information about the JDB having pp is not accurate? This is "any" information, isn't it?

Link to post
Share on other sites

The CRAs will say it is a record of who had access to your account, and to a point they are right. I do not see anything that says you can not use the method, but I also do not see anything that says you can. Likely if you go to court the issue of Credit pulls being addressed in another section will derail the case.

I take quite a different point of view on credit pulls. I was the victim of identity theft that came from a CA by a rouge employee just pulling reports on people. So I go after them fast and hard. In your case you can make out that it was proven in court that the debt was invalid, therefore they had ample notice that they did not have PP and it was knowing noncompliance. At $1,000 per violation of this section, it can be quite painful for them real fast.

Link to post
Share on other sites

I started a thread at MyFico.com and came up with this answer on disputing inquiries:

The direct dispute process has been in the statute as section 623(a)(8) for about about a decade. However, when enacting the statue, congress specified that it would not become effective until rulemaking was held and implementing rules were published by the designated federal agencies. See FCRA 623(a)(8)(A)-©.

Those regulations were finally published in the Federal Register on 7/1/2009, setting an effective date of 7/1/2010. See 3184 FedReg, Vol.74, No. 125, 7/1/2009.

Those regulations have now been incorporated into the Code of Federal Regulations at 16 CFR 660.4, and have the effect of statute. Accordingly, the "nuts and bolts" details of the direct dispute process are found at 16 CFR 660.4 rather than in the FCRA itself.

16 CFR 660.4(B) specifies certain items that are exempted from the provisions of the direct disptue process. Direct disputes relating to inquries or requests for a consumer credit report are specifically exempted under section 16 CFR 660.4(1)(iii). That leaves the dispute process through the CRAs under FCRA 611(a) as the only avenue for dispute of credit inquiries. This interjects the CRA into the process, and gives them the ability to verify the filing of a statement of permissible purpose by the requestor as their legitimate basis for honoring the credit inquiry.

Impermissible purpose for account review - myFICO® Forums

I also found it interesting that Transunion generally said that they don't do disputes on inquiries yet their affiliate, Truecredit, says that consumers can dispute inquiries with CRA's. The link is in the other thread.

Link to post
Share on other sites

Okay, I finally got a chance to look up the Code of Federal Regulations at 16 CFR 660.4. Here's the section which exempts inquiries:

(B) Exceptions. The requirements of paragraph (a) of this section do not apply to a furnisher if:

(1) The direct dispute relates to:

(i) The consumer's identifying information (other than a direct dispute relating to a consumer's liability for a credit account or other debt with the furnisher, as provided in paragraph (a)(1) of this section) such as name(s), date of birth, Social Security number, telephone number(s), or address(es);

(ii) The identity of past or present employers;

(iii) Inquiries or requests for a consumer report;

(iv) Information derived from public records, such as judgments, bankruptcies, liens, and other legal matters (unless provided by a furnisher with an account or other relationship with the consumer);

(v) Information related to fraud alerts or active duty alerts; or

(vi) Information provided to a consumer reporting agency by another furnisher; or

16 CFR 660.4 - Direct disputes. - Code of Federal Regulations - Title 16: Commercial Practices - PART 660: DUTIES OF FURNISHERS OF INFORMATION TO CONSUMER REPORTING AGENCIES - Id 300434414 - vLex

Some of these exemptions make sense because the data furnisher didn't have anything to do with supplying the information like fraud alerts. They did, however, have everything to do with their certified pp.

It doesn't matter because it appears that a consumer can dispute directly to the CRA about inquiries under 611(a)(1) and then the CRA must contact the data furnisher. If the data furnisher does not verify the information then the CRA must delete that information. The CRA must then notify the consumer of the results.

The way I read the FCRA, the main difference between 611 and 623 is that the consumer is disputing directly to the data furnisher under 623 while the consumer would be disputing directly to the CRA under 611.

So, the answer to my thread question is no, you cannot use the 623 method to dispute impermissible purpose but you can use 611...unless there is another Federal regulation out there with exemptions for 611.

I'm going to pursue this issue and will keep you all informed. Feed back is always welcome.

Link to post
Share on other sites
Guest
This topic is now closed to further replies.