The credit bureaus reportedly process over 20,000 disputes per day. That's over half a million
disputes a month.
According to a 2009 SmartMoney.com article, about 30% of those disputes come from credit
repair companies, which means 70% of them are disputes sent to the credit bureaus by
consumers like you.
The FCRA requires the credit bureaus to conduct a "reasonable" investigation into each
"In general. Subject to subsection (f), if the completeness or accuracy of any item of information
contained in a consumer's file at a consumer reporting agency is disputed by the consumer and
the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the
agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the
disputed information is inaccurate and record the current status of the disputed information, or
delete the item from the file in accordance with paragraph (5), before the end of the 30-day
period beginning on the date on which the agency receives the notice of the dispute from the
consumer or reseller." (FCRA 611(a)1(A)
–That IS from the Fair Credit Reporting Act.
A person might wonder exactly how the credit bureaus are managing to conduct over 6 million
"reasonable" investigations every year. The short answer is: they're NOT!
Now for the long answer:
In FCRA Section 611(a)(5)(D) we find the following text:
"Automated reinvestigation system. Any consumer reporting agency that compiles and maintains
files on consumers on a nationwide basis shall implement an automated system through which
furnishers of information to that consumer reporting agency may report the results of a
reinvestigation that finds incomplete or inaccurate information in a consumer's file to other such
consumer reporting agencies."
In response to this mandate and in order to reduce the cost of processing disputes, the credit
bureaus have implemented a system called "e-Oscar" which serves as an automated dispute
E-Oscar is a web-based software system through which information about disputes is
communicated. E-Oscar enables maximum automation of dispute processing by:
– Requiring that all disputes be reduced to the form of a single numeric code. The code is the
only thing transmitted to the creditor with regards to a dispute.
There are 26 codes to choose from, and regardless of how much documentation and detail you
send with a dispute, it is going to be reduced to one of those codes. (Note that the FCRA requires
the bureau to forward "all relevant information" regarding a disputed item to the furnisher. So
"all relevant information" is apparently ALWAYS one of 26 numeric codes… yeah, right!)
– Allowing automated responses on the part of the creditors.
Since everything is being transmitted electronically, the creditor receives disputes in the form of
numeric codes tied to a consumer's name, address, and perhaps account number.
The creditor can then use an automated computer system to check for a corresponding account,
read the code, and make an automated "decision" about what to do.
This means that a dispute can be verified without a human being ever looking at it on the
So through e-Oscar, the process of the "reasonable investigation" can be completely automated.
For the bureaus part, they must get the dispute from paper (if you have mailed a paper dispute)
into a numeric code.
This is typically done with a mixture of sophisticated computer software and low paid foreign
The bureau worker (or computer) simply categorizes the dispute and sends it on to the creditor,
where no "real" investigation is likely to take place.
And that is apparently how the bureaus define "reasonable" investigation.
Obviously, there is no such investigation taking place… and that's the point.
The real way the bureaus process over 20,000 disputes per day is by not meeting the
requirements of the FCRA.
They are required to conduct a reasonable investigation. They don't. They are required to forward
all relevant information to the furnisher. They don't. And this is where the real key to this issue
comes into play.
If you dispute something and it comes back verified, the question you need to ask is this:
-Did your dispute contain supporting documentation and details (yes, it should have)
-Was the supporting documentation sent with your dispute "RELEVANT"? (of course)
-Was that supporting documentation forwarded to the creditor? (of course not)
-Was this a "reasonable" investigation????
So at this point you have every right to raise a fuss and stay in the fight. The credit bureaus are
simply NOT fulfilling their requirement under the law, and consumers should not have to stand
Unfortunately correcting this injustice is easier said than done.
The credit bureaus have very little motivation to do anything about fixing their system or the
errors on your credit report. They make billions of dollars.
Even lawsuits in the millions of dollars aren't going to deter them from their streamlined system
for ignoring the law. But you can still use this fact to your advantage.
The fact that no "reasonable" investigation has taken place can be used to put pressure on the
bureau through various noise-making tactics like local media and the BBB.
You can also take the fight to the creditor with similar arguments.