FCRA Accuracy and Reasonable Procedures

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Accuracy and Reasonable Procedures

When a CRA prepares a consumer report, it must follow “reasonable procedures” to assure “maximum possible accuracy” of the information concerning the individual.   Reasonable procedures do not require 100% accuracy because:

• If an inaccurate item has appeared on a consumer report, that alone is insufficient for an FCRA violation.
• According to the “strict liability statute”, an inaccuracy alone is not enough for an FCRA violation.
• There is a “threshold requirement” for a claim which must prove: inaccuracy, failure to follow reasonable procedures, an injury, and that the injury was caused by the inaccuracy.

To claim inaccuracy, there are several conditions:

• Misleading or incomplete –Technical accuracy alone does not eliminate liability.  CRAs are liable for reporting technically accurate information even if it is nevertheless “misleading” or “incomplete”.  If report offenses are reported twice, though technically accurate, they make criminal records seem longer and are therefore misleading.
• Duplicate reporting - Technical accuracy is not a defense if the information is incomplete or misleading.  The same information showing up multiple times is misleading by making a public record history appear lengthier than it is.  Duplicate reporting does not meet the “maximum possible accuracy” standard and places an applicant in an adverse light.
• Litigation Pending – Includes reporting account as “litigation pending” without indicating that the consumer had initiated the lawsuit.
• Reporting of duplicates – Includes reporting of “duplicate” convictions or a criminal charge that lacks the disposition.
• Incomplete – Later on has an offense expunged, deferred disposition and charge is reduced from a felony to a misdemeanor or felony expunged.  True just not complete.

Continue to FCRA Permissible Purpose, or jump to a different article.

1. Fundamentals of The Fair Credit Reporting Act (FCRA)
2. Industry Players Under FCRA
3. Accuracy and Reasonable Procedures
4. FCRA Permissible Purpose
5. Adverse Action Notification
6. Reinvestigation, Disclosures, Disposal of Consumer Information
7. What is a Consumer Report?
8. A summary of consumer rights under FCRA
9. FCRA Litigation
10. State Versions of FCRA and FCRA California