Data Furnisher Agreement
A data furnisher agreement is an established and written document. This established and written document includes the policies and procedures regarding the accuracy and integrity of the information. The accuracy and integrity of the information must be observed by data furnishers upon providing it to a credit reporting agency.
The data furnisher agreement guidelines can be accessed in Appendix A to Furnisher Rule Part 660. Appendix A to Furnisher Rule Part 660 states the following:
- Data furnishers are required to establish their policies and procedures that are appropriate to the nature, size, complexity, and scope of their activities.
- Types of businesses they engage with
- Nature and frequency of the information they provide to consumer reporting agencies
- The technology used in providing information to consumer reporting agencies
- Data furnishers are required to promote the following objectives in their policies and procedures.
- The furnished information about accounts or other relationships with a customer must be accurate such that it identifies the right customer, reflects the terms and liabilities of accounts or relationships, and shows the customer’s performance and other conduct.
- The furnished information about accounts or other relationships with a customer must have integrity such that it is validated by the data furnisher records, provided in a way that the likelihood of inaccurate information is to a minimum, and includes a credit limit if applicable.
- Reasonable investigations of customer disputes must be conducted, and appropriate actions must be taken based on the outcome of the investigations.
Furnished information must be updated if necessary to reflect the current status of the customer's account, including any transfer of an account or any remedy of the customer's failure to abide by the account or relationship terms.
Data furnishers must do the following in establishing and implementing their policies and procedures.
- Identify practices or activities that can compromise the accuracy and integrity of the furnished information by reviewing its existing practices, activities, and historical records, considering feedback from credit reporting agencies and data furnishers’ staff, and considering the potential impact of their policies and procedures to customers.
- Evaluate the effectiveness of existing policies and procedures regarding the accuracy and integrity of the furnished information by considering whether new, additional, or modifications are needed to enhance the accuracy and integrity of furnished information.
- Evaluate the effectiveness of specific methods they use to provide information to consumer reporting agencies by considering whether new, additional, or modifications are needed to enhance the accuracy and integrity of furnished information.
Data furnishers must address the following in developing their policies and procedures.
- Using standard data reporting formats and standard procedures for putting together and providing data like electronic transmission to consumer reporting agencies
- Maintaining records for a suitable time period to prove the accuracy of furnished information.
- Establishing and implementing suitable internal controls regarding the accuracy and integrity of the information provided to consumer reporting agencies
- Training staff that takes part in activities related to providing customer information to consumer reporting agencies
- Providing an appropriate and effective oversight of service providers to maintain the accuracy and integrity of information
- Deleting, updating, and correcting information in the furnishing records to prevent providing inaccurate information
- Conducting reasonable investigations of disputes
- Providing consumer reporting agencies with enough identifying information about each customer
- Designing technological means of communication with consumer reporting agencies to prevent duplicate reporting, wrong customer association, and other instances that may compromise the accuracy and integrity of information
- Conducting a periodic evaluation of their practices, consumer reporting agency practices, investigations of disputed information, corrections of inaccurate information, and other means of communication
- Complying with applicable requirements under the FCRA and its implementing regulations
Data Furnisher Requirements
The data furnisher requirements are established by the Fair Credit Reporting Act (FCRA)’s Furnisher Rule. The FCRA Furnisher Rule includes legal obligations of the data furnisher, including:
- Data furnishers must provide information that is accurate and complete.
- Data furnishers must investigate customer disputes about the accuracy of the information they provide.
Data furnishers, as stated by the FCRA, must ensure the accuracy of the furnished information. Furnished or provided information must not be reported by data furnishers if they know or believe that it is inaccurate. Inaccurate information could be reported by the customer if an address was provided by data furnishers. Data furnishers must not provide information if they are informed by the customer about the inaccurate information. Inaccurate information must have a reasonable cause or specific knowledge for data furnishers to believe that the information is inaccurate.
Inaccurate information, as stated by the Federal Trade Commission (FTC), can be disputed by the customer in two ways:
- The customer can submit a dispute to a consumer reporting agency.
- The customer can submit a dispute directly to data furnishers.
Data furnishers will be notified by a consumer reporting agency regarding the information dispute. The information dispute must be addressed by data furnishers by:
- Investigating the dispute and reviewing all relevant information given by the consumer reporting agency about the dispute
- Reporting their findings to the consumer reporting agency
- Providing corrected information to every consumer reporting agency that received the information if their investigation shows that the information is incomplete or inaccurate
- Changing the information, deleting it, or blocking its reporting permanently if the information turns out to be inaccurate, incomplete, or unverifiable
These steps must be followed and completed within the same time allowed under the FCRA for the dispute to be resolved by the consumer reporting agency. The consumer reporting agency has 30 days to resolve after getting the dispute from the customer. The customer can provide additional relevant information, which gives 15 days more to the consumer reporting agency. The consumer reporting agency must give the additional relevant information provided by the customer to the data furnishers. The data furnishers must investigate and respond to it within the allowable time, or else the consumer reporting agency must remove the disputed information from its files.