Let's begin with some background. Before the Fair and Accurate Credit Transactions Act (FACT Act or FACTA), the Fair Credit Reporting Act (FCRA) required consumers to raise disputes about the information in their credit reports with one or more consumer reporting agencies (CRAs), not with the furnishers of that information. The CRA was required to investigate the disputed information and, if necessary, contact the furnisher (i.e., provide the furnisher with an “indirect” dispute). After hearing back from the furnisher, the CRA was required to report to the consumer.
The FACT Act supplemented this process by amending the FCRA to allow consumers to directly dispute credit report information with furnishers of information, under certain circumstances. Consumers now can submit a dispute directly to the furnisher (viz., a “direct” dispute) when the issue relates to information for which the furnisher is responsible.
Regulation V, which implements the FCRA, requires a furnisher to conduct a “reasonable investigation” of a direct dispute if it relates to any of the following circumstances ...