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Federal Register / Vol. 86, No. 128 / Thursday, July 8, 2021 / Notices
consumers that they owed this larger amount.5
Consumers financed the purchase of the optional product by adding it to the loan amount of a vehicle purchase. The contracts provided that consumers or servicers could cancel the product at any time and receive a pro-rata refund less a cancellation fee. Servicers prepared payoff statements in response to consumers requests that included a line listing credits for refunds from optional products and a total payoff amount. Servicers calculated this refund based on the actuarial value of the policies, instead of using the prorata calculation specified in the contract. In some instances, this resulted in payoff statements that listed a total amount due that was larger than the amount the consumer owed.
The conduct caused or was likely to cause substantial injury to consumers because servicers accepted money from consumers that the consumers did not actually owe. Consumers could not reasonably avoid the injury because they paid the servicers the amount they told them they owed. Consumers are not required to independently verify that servicers correctly calculated optional product refund amounts and therefore the injury could not be reasonably avoided. The injury is not outweighed by countervailing benefits to consumers or competition. Servicers can update their systems to perform appropriate calculations without significant cost.
Servicers have refunded overpayments to consumers and updated their systems to perform calculations that are consistent with the contract terms.
2.2 Consumer Reporting Entities that obtain or use consumer reports from consumer reporting companies CRCs,6 or that furnish information relating to consumers for inclusion in consumer reports, play a vital role in the consumer reporting process. They are subject to several requirements under the Fair Credit Reporting Act FCRA 7 and its implementing regulation, Regulation V.8
These include the requirement to furnish data subject to the relevant accuracy and dispute handling requirements. In recent reviews, examiners found deficiencies in, among
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5 Id.
6 The term consumer reporting company means the same as consumer reporting agency, as defined in the Fair Credit Reporting Act, 15 U.S.C.
1681af, including nationwide consumer reporting agencies as defined in 15 U.S.C. 1681ap and nationwide specialty consumer reporting agencies as defined in 15 U.S.C. 1681ax.
7 15 U.S.C. 1681 et seq.
8 12 CFR part 1022.

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other things, CRCs compliance with FCRA: i Accuracy requirements, ii security freeze requirements applicable only for nationwide CRCs as defined in FCRA section 603p,9 and iii requirements regarding ID theft block requests. Examiners also found deficiencies in furnisher compliance with FCRA and Regulation V accuracy and dispute investigation requirements.
2.2.1 CRC Duty To Follow Reasonable Procedures To Assure Maximum Possible Accuracy The FCRA requires that, whenever a CRC prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. 10 In reviews of CRCs, examiners found that CRCs accuracy procedures failed to comply with this obligation because the CRC continued to include information in consumer reports that was provided by unreliable furnishers. Specifically, the furnishers had responded to disputes in ways that suggested that the furnishers were no longer sources of reliable, verifiable information about consumers. For example, CRCs received furnisher dispute responses indicating that, for several months, furnishers failed to respond to all or nearly all disputes, deleted all or nearly all tradelines disputed by consumers, or verified as accurate all or nearly all tradelines disputed by consumers. Despite observing this dispute response behavior by these furnishers, CRCs continued to include information from these furnishers. After identification of these issues, CRCs were directed to revise their accuracy procedures to identify and take corrective action regarding data from furnishers whose dispute response behavior indicates the furnisher is not a source of reliable, verifiable information about consumers.
2.2.2 CRC Duty To Timely Place Security Freezes on Consumer Reports Upon Consumer Request The FCRA requires that nationwide CRCs must, free of charge, place a security freeze on a consumers report upon receiving a direct request from a consumer and upon receiving proper identification from the consumer. . . . 11 The security freeze must be placed not later than ii in the case of a request that is by mail, 3
business days after receiving the request
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directly from the consumer. 12 In reviews of nationwide CRCs, examiners found that CRCs failed to place security freezes within three business days after receiving the request by mail. One root cause was determined to be inadequate training, and to address that root cause, targeted training to appropriate staff regarding the requirements and timing of placing security freezes was provided.
2.2.3 CRC Duty To Block Reporting of Information Identified as Resulting From Identity Theft The FCRA requires that CRCs must block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft. . . . 13 The block must be made not later than 4 business days after the date of receipt of a qualifying block request.14 In reviews of CRCs, examiners found that CRCs failed to place ID theft blocks within four business days of receipt of qualifying block requests. The block requests were delayed due to a backlog that the CRCs subsequently resolved. In response to these issues, the CRCs updated policies and procedures to ensure the timely processing and blocking of information identified in ID
theft block requests.
2.2.4 Furnisher Duty To Update and Correct Information The FCRA requires that persons who regularly and in the ordinary course of business furnish information to CRCs about that persons transactions or experiences with consumers must, upon determining that information furnished to CRCs is not complete or accurate, promptly notify the consumer reporting agency of that determination.
The furnisher must then provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate. 15
In a review of auto loan furnishers, examiners found that furnishers failed to send updating or correcting information to CRCs after making a determination that information furnishers had reported was no longer accurate. For example, examiners found that after consumers had applied for an auto loan but later communicated they 12 15

9 15

U.S.C. 1681ap.
10 15 U.S.C. 1681eb.
11 15 U.S.C. 1681c1i2A.

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