Credit Repair Articles

The One Law That Limits What A Credit Repair Company Can Do For You

Credit Repair Articles - Credit Repair

There is a small snippet of text tucked away in the FCRA that limits what any credit repair company can do for you the consumer.

Most consumers don't know it's there, and many credit repair companies probably don't even know about it.

Here's the text in Section 623(a)(8)(G) of the FCRA:

"Exclusion of credit repair organizations. This paragraph shall not apply if the notice of the dispute is submitted by, is prepared on behalf of the consumer by, or is submitted on a form supplied to the consumer by, a credit repair organization, as defined in section 403(3), or an entity that would be a credit repair organization, but for section 403(3)(B)(i)."

So "credit repair organizations" are excluded here... and even if the credit repair company doesn't SEND the letter but only PREPARES it for the consumer, the exclusion still applies.

Excluded from what?

For that we have to go further up in the text.

FCRA 623(a)(8) starts out with the following heading:

"Ability of Consumer to Dispute Information Directly with Furnisher"

Then it goes on later to say...

"(E) Duty of person after receiving notice of dispute. After receiving a notice of dispute from a consumer pursuant to subparagraph (D), the person that provided the information in dispute to a consumer reporting agency shall – (i) conduct an investigation with respect to the disputed information; (ii) review all relevant information provided by the consumer with the notice; (iii) complete such person's investigation of the dispute and report the results of the investigation to the consumer before the expiration of the period under section 611(a)(1) within which a consumer reporting agency would be required to complete its action if the consumer had elected to dispute the information under that section; and
(iv) if the investigation finds that the information reported was inaccurate, promptly notify each consumer reporting agency to which the person furnished the inaccurate information of that determination and provide to the agency any correction to that information that is necessary to make the information provided by the person accurate."

Subparagraph (F) states that if the furnisher believes the dispute is frivolous, they must notify the consumer within 5 business days.

Everything to this point has described the furnisher's duty to INVESTIGATE disputes that come directly from the CONSUMER.

And then we get to subparagraph (G):

"Exclusion of credit repair organizations. This paragraph shall not apply if the notice of the dispute is submitted by, is prepared on behalf of the consumer by, or is submitted on a form supplied to the consumer by, a credit repair organization, as defined in section 403(3), or an entity that would be a credit repair organization, but for section 403(3)(B)(i)."

In other words, if the dispute came from a credit repair company, NONE of FCRA 623(a)(8) applies.

So there is "NO DIRECT DISPUTE" right if the dispute is submitted by or even CREATED BY a credit repair company.

The furnisher can legally and safely ignore it. No requirement to notify the consumer that they think it's frivolous. No letters, no emails, no phone calls, Nada.

Just empty space and ZERO requirements under the law.

This means that a credit repair company CANNOT effectively dispute with the furnisher for you. If you've ever done any work to repair your own credit, you are probably familiar with the "run-around" from the bureaus.

For consumers, having the option of going to the creditor instead is an IMPORTANT avenue to keep open.

And because of FCRA 623(a)(8)(G), credit repair companies do not have that option.

 


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