subject: The Fair Credit Reporting Act: Important Information Every Business Owner Needs To Know [print this page] The Fair Credit Reporting Act impacts every business. This is because the FTC requires businesses to report accurate information about debtors who owe money. Every business owner responsible for handling internal debt collections needs to understand The FCRA.
Organizations that fail to adhere to these laws might be risking costly fines. And in some cases, debts owed to them could be discharged. Debt collection is a difficult process. However, it is very important for any business handling debt collections to fully understand the law.
Understanding The Fair Credit Reporting Act
The FCRA states that consumers have the right to verify the accuracy of the information contained in their credit report. It also says that businesses are responsible for ensuring the accuracy of the information contained in these reports to the best of their ability. It is imperative that businesses understand how this affects debt collection.
Should your business receive a complaint from one of the three credit bureaus (TransUnion, Equifax or Experian), you have a period of 30 days to show proof of the debt owed or it will be removed from the individual's credit report, per the FCRA.
In debt collection, The FCRA is critical to understand. If you file a claim that is inaccurate, you could face legal ramifications if you did so intentionally. More so, the FTC, or Federal Trade Commission can work against your ability to file such claims in the future.
The Fair Credit Reporting Act works to the benefit of your business as well. As long as information about the debt is reported correctly, it should be used by the business to make sure other businesses know of this individual's failure to pay their debt. Other businesses will certainly want to know what to expect from a potential customer before working with them.
Some Important Facts
For any business handling debt collection, there is a lot one needs to know about The FCRA. If they supply consumer information to the credit bureaus, they are responsible for providing only accurate information. This law was recently updated to expand consumers rights.
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.
