CFPB Issues $27.75 Million Consent Order Against Bank over Consumer Reporting Inaccuracies

The CFPB recently issued a consent order against a national bank for reporting inaccurate information to credit reporting agencies (CRAs) in several ways, which the bank discovered but did not fix for one to two years.

According to the CFPB, the bank failed to update its systems to reflect payments made to a third-party collections company, which had sent the bank a monthly file showing the payments made by consumers.  The CFPB alleged that the bank discovered the issue in 2017, and did not update the CRAs until two years later.  In the meantime, the bank regularly furnished consumer credit report information containing errors, and failed to investigate errors when challenged by consumers, including consumer indirect disputes, sometimes allowing errors to remain on credit reports for more than a year.  

In addition, the CFPB alleged that for credit card accounts that it charged off, the bank inaccurately reported the date of first delinquency as the charge-off date, rather than the month and year of the start of the delinquency on the account.  As a result, the bank reported the date of first delinquency for these accounts as several months later than should have been reported.  The CFPB also alleged that the bank reported inaccurate information concerning confirmed fraud on credit card accounts; bankruptcy status of certain accounts; and voluntarily closed accounts.

The CFPB alleged that these errors and actions violated FCRA and Regulation V.  The bank will pay $7.76 million to adversely affected consumers and $20 million in penalties to the CFPB. The bank neither admits nor denies the CFPB’s allegations.