The CFPB announced that it has entered into a settlement with Afni, Inc. to address its alleged FCRA violations in furnishing consumer information to consumer reporting agencies (CRAs).  Afni is a debt collector specializing in the collection of debts on behalf of telecommunications companies.  The consent order imposes a $500,000 civil money penalty.

The FCRA/Regulation V violations identified by the Bureau included the following:

  • FCRA Section 623(a)(1) provides that unless a furnisher clearly and conspicuously provides an address to which a consumer can send notice that information furnished to a CRA is inaccurate, a furnisher may not furnish any information relating to the consumer to any CRA if the furnisher knows or has reasonable cause to believe that the information is inaccurate.  The Bureau found that Afni did not specify such an address on any correspondence used generally with consumers and that the furnishing logic of the automated system used by Afni to furnish information to CRAs did not correctly input some account information into the format used for reporting, resulting in inaccurately reported information.  According to the Bureau, Afni violated Section 623(a)(1) because it (1) knew or had reasonable cause to believe the information it furnished to CRAs was inaccurate because it was different than the information in Afni’s files, and (2) did not clearly and conspicuously specify an address for notices that furnished information was inaccurate.
  • FCRA Section 623(a)(5) requires a furnisher of information regarding a delinquent account being placed for collection to notify the CRA of the date the delinquency began.  According to the Bureau, Afni violated Section 623(a)(5) because it failed to notify CRAs of the date of first delinquency on many accounts on which it furnished information.
  • FCRA Section 623(b)(1) provides than when a furnisher receives a notice of dispute regarding the completeness or accuracy of reported information from a CRA, the furnisher must conduct a reasonable investigation and review all relevant information provided by the CRA.  According to the Bureau, Afni violated Section 623(b)(1) because it did not conduct a reasonable investigation as required for reasons that included (1) not reaching out to the original creditor for information needed to reasonably investigate a dispute when the consumer’s allegations could not be reasonably investigated with the information in Afni’s files, and (2) using an automated program to handle certain disputes that only considered information in Afni’s database, did not access any creditor files, and did not refer disputes to creditors for further investigation.
  • Regulation V Section 1022.42 requires a furnisher to establish and implement reasonable written policies and procedures regarding the integrity and accuracy of information furnished to CRAs, consider and incorporate the appropriate guidelines in Appendix E to Regulation V in developing such policies and procedures, and periodically review such policies and procedures and update them as necessary to ensure their continued effectiveness.  The Bureau found that (1) Afni’s indirect dispute policy did not instruct its employees to access creditors’ systems or make requests to creditors to obtain information or source documentation as needed before attempting to resolve an indirect dispute, (2) Afni had no written policies explaining how its automated E-OSCAR program responds to indirect disputes or a policy that explained how to conduct a reasonable investigation of a FCRA dispute, (3) Afni’s direct dispute policy did not include procedures on how to determine whether a dispute was frivolous or irrelevant or require employees to send notices of such determinations, and (4) Afni’s policies and procedures were not reviewed or updated as necessary for continued effectiveness, with Afni having failed (a) to modify its automated furnishing code for at least 4 years prior to 2017 and (b) to review or update its dispute policies and procedures despite having knowledge that its employees were not complying with them.  According to the Bureau, based on these findings, Afni violated Section 1022.43 by not establishing or implementing reasonable policies and procedures regarding its furnishing of information to CRAs or handling disputes, not considering or incorporating Appendix E guidelines in developing its policies and procedures regarding the integrity and accuracy of information furnished to CRAs, and failing to review such policies and procedures and update them as necessary for continued effectiveness.

In addition to payment of the civil money penalty, the consent order requires Afni to take certain steps to improve and ensure the accuracy of the consumer information it furnishes to CRAs and its policies and procedures relating to credit reporting and dispute investigation.  These steps include conducting monthly reviews of account information to assess the accuracy and integrity of information it furnishes, conducting monthly reviews of consumer disputes and responses to assess whether its handling of consumer disputes complies with the FCRA/Regulation V and its own policies and procedures, and hiring an independent consultant to conduct a review of Afni’s activities, policies, and procedures relating to furnishing information and credit reporting.