The Fair Credit Reporting Act: What You Should Know As A Business Owner
Businesses that fail to adhere to these required laws may be risking costly fines and in some cases discharge of the debt owed to them. Debt collection is not an easy process but it is critical for any business handling debt collections to fully understand this law.
Understanding The Fair Credit Reporting Act
The FCRA states that consumers have rights concerning the accuracy of credit information about them contained in their credit report. It also states that businesses are responsible for the accuracy of the information contained in these reports to the best of their ability. It is important that businesses understand how this impacts 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 file, per the FCRA.
As it relates to debt collection, it is very important to understand The FCRA. Should you file an inaccurate claim, you could face legal fallout if done so intentionally. In addition, the FTC can limit your ability to file future claims.
The FCRA does work on behalf of your business though. As long as the debt collection is accurate, it should be utilized by the business to ensure that other businesses know that this individual failed to make payment. Any business will want to know what to expect from a potential debtor before working with them.
More Important Facts
For any businesses or associates handling debt collection, there is much to know about the Fair Credit Reporting Act. Businesses that supply information to the consumer reporting agencies are responsible for submitting only accurate information. The law was updated to expand the rights of the consumer.
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.