CFPB Issues Record $19 Million Penalty for Credit Reporting Violations: Three Steps Your Company Must Take to Comply with the Law

On July 26, 2022, the CFPB issued a record penalty of more than $19 million against a creditor/furnisher of consumer information to the credit bureaus, alleging that the creditor failed to remedy harmful inaccuracy issues that persisted for several years[1]. The CFPB had previously issued a penalty of nearly $2 million against a debt collector that also allegedly failed to report accurate consumer information to the credit reporting agencies[2]. These two actions by the CFPB that resulted in millions of dollars in penalties provide specific guidance on steps that every company reporting consumer information to the credit reporting agencies must take to avoid violations of the law.

1. Examine Individual Consumer Disputes for Evidence of Systemic Issues

In one of the recent cases where the CFPB issued a fine in excess of $1 million for FCRA violations, the furnisher/creditor was aware of the credit reporting issues due to individual consumer disputes, but the creditor failed to assess the system-wide scope of the issues. Often consumer disputes are the first warning sign of a systemic issue and thus furnishers should audit individual consumer disputes and take systemic corrective action. In this CFPB recent action, the Consent Order provides the following:  

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