More accurate consumer credit information and a more finely tuned consumer credit information dispute resolution process are among the latest round of federal consumer credit law provisions slated for rule making.

Since the Fair and Accurate Credit Transactions Act (FACT Act) was enacted Dec. 4. 2003 to amend and strengthen the Fair Credit Reporting Act (FCRA), the feds have been rolling out a host of regulations to better safeguard consumers' credit and financial information, as well as to give consumers greater access and control over that information.

Among the provisions are free consumer access to credit and finance reports stockpiled by both major credit agencies and smaller personal data collection firms; fraud and identity theft protection provisions and more thorough procedures for disposing and monitoring the disposal of sensitive consumer credit and finance data.

The latest rule making addresses FACT Act's Section 312and is open for public comment until the end of May.

Section 312 will mandate that regulated credit and financial information data warehouses, including Equifax, Experian and TransUnion, as well as smaller specialized consumer reporting agencies, fine tune the information provided by "furnishers," including banks, credit unions, finance companies, employers, insurance companies, doctors and hospitals, debt collectors, and landlords.

Under current law, furnishers' information is used, in part, to determine consumers' eligibility for credit, employment, insurance, rental housing, and other products and services, as well as the terms and costs of credit, insurance, and other products and services.

The problem is, furnishers aren't uniform in the way they supply credit and data agencies with information. Not all furnishers regularly provide information. Some furnishers provide only negative information. Some may provide information to one or two of the big three credit reporting agencies. Others may report only to one of the smaller specialized consumer reporting agencies. Still others don't report data at all.

Unfortunately, that inconsistency can lead to both errors of omission and errors of fact that can impact a consumers' creditworthiness, and ultimately, consumers' cost of eligibility for financial products and services.

The feds are requiring that credit reporting agencies correct that approach by coordinating information collection procedures that are consistent and comparable across all agencies.

Under proposed provisions, the feds say agencies must:

• Identify patterns, practices, and specific forms of activity that can compromise the accuracy and integrity of information furnished to consumer reporting agencies.

• Review the methods (including technological means) used to furnish consumer information to consumer reporting agencies.

• Determine whether furnishers maintain and enforce policies to assure the accuracy and integrity of information furnished to consumer reporting agencies.

• Examine the policies and processes employed by furnishers to conduct investigations and to correct inaccurate consumer information that has been furnished to consumer reporting agencies.

Another provision will address how furnishers address consumer complaints about information, when consumers appeal directly to the furnisher, rather than to the credit or finance reporting agency and what role credit repair agencies should play in information disputes.

Right now, when a credit reporting agency notifies a furnisher of a consumer dispute the furnisher must investigate the complaint, report findings back to the agency, provide any corrected information to all consumer reporting agencies that received the original information and prevent a repeat of furnishing that same incorrect or unverifiable information.

Under new rules, agencies must identify when a furnisher is required to investigate a dispute based on a direct request from the consumer.

To get a handle on when that should happen, the feds have instructed agencies to:

• Weigh such a regulation's benefits to consumers against the costs on furnishers and the credit reporting system.

• Determine the impact of such a regulation on the overall accuracy and integrity of consumer reports.

• Determine if direct contact by the consumer with the furnisher would likely result in the most expeditious resolution of any dispute.

• Weight the potential impact on the credit reporting process if credit repair organizations are able to circumvent provisions which state that the direct dispute rules shall not apply when credit repair organizations provide notices of dispute on behalf of consumers.

This is the latest in an ongoing series of reports about the Fair and Accurate Credit Transactions Act (FACT Act) since it was enacted Dec. 4. 2003 to amend and strengthen the Fair Credit Reporting Act (FCRA). Previous reports that explain other provisions of the law and its benefits for consumers are available from the list below.

Published: March 28, 2006

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.