Consumer complaint received 2024-10-31
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Problem with a company's investigation into an existing problem — Their investigation did not fix an error on your report
Company: HEARTLAND PAYMENT SYSTEMS INC (MI)

On XXXX XX/XX/XXXX Complainant filed a direct dispute ( CFPB XXXX ) against regarding ECSI 's furnishing of false, misleading and inaccurate information of XXXX ( XXXX ) private student loan for inclusion in the files XXXX, XXXX, and XXXX maintain and disseminate regarding Complainant. Specifically, Complainant identified several pieces of information furnished by ECSI to the CRAs that were facially inaccurate, incomplete and/or misleading. On XXXX XX/XX/XXXX ECSI responded to the direct dispute with generic language stating in part, " As a third party servicer, ECSI, is required to maintain the integrity of the credit information provided to the XXXX major credit bureaus. The Fair Credit Reporting Act requires furnishers of information to provide accurate information to the reporting agencies. '' However, that is NOT the standard. The standard requires that information furnished to the credit reporting agencies under 1681s-2 be both accurate and *not*materially misleading ( emphasis added ). ECSI continued in its response to CFPB XXXX, stating " Our records reflect the activity on your loan was reported accurately to the credit bureaus. Any adjustments made to your credit report that are not warranted would compromise the integrity of the data. We have verified that no error in reporting has occurred and we will continue to report the factual credit history on your loan. '' However, the integrity of the data was already compromised by ECSI itself. In Complainant 's notice of dispute, ( CFPB XXXX ) Complainant identified specific issues with the information ECSI furnished to the CRAs for the months of XX/XX/XXXX and XX/XX/XXXX. Had ECSI conducted a cursory examination of the billing statements it would have found several billing irregularity, which appear to correlate with the inaccurate information reported for the XXXX ( XXXX ) accounts ECSI furnishes to the CRAs regarding Complainant. For example, a billing statement generated on XXXX XX/XX/XXXX has a statement due-date of XXXX XX/XX/XXXX. This does not fall in-line with standard practices for statement generation for private student loans which is typically at least XXXX ( XXXX ) days between statement generation date and statement due date. For exposition, TILA/Regulation Z requires a policy for credit card accounts of not less than twenty-one ( 21 ) days between statement generation date and statement due-date. Now, the same statement with the abridged interval between generation date and due date also alleges that at time of statement generation ( XXXX XX/XX/XXXX ) the account was fifteen ( 15 ) days past-due. Yet, only thirteen ( 13 ) days had passed between the previous statement due-date ( XXXX XX/XX/XXXX ) and the new statement generation date ( XXXX XX/XX/XXXX ), calling into question the integrity of ECSI 's billing cycle policies and data verification systems. Finally, and perhaps egregious, even under the supposition that somehow fifteen ( 15 ) days had elapsed between XXXX XX/XX/XXXX and XXXX XX/XX/XXXX, XXXX provided the following information regarding what it was furnishing to the CRAs regarding the account status at that time : " Credit Bureau rating as of the above due date : Past Due 30 Days ''. Hence, the XXXX issues, payment history issues, and payment status issues that Complainant identified were a directly related to the billing error issues for the identified statement. Clearly, ECSI failed as a data furnisher under 15 U.S.C. 1681s-2 ( b ) ( 1 ) ( A ) which mandates furnishers conduct an investigation of disputed information.

In addition, ECSIs practices contravene the requirements outlined in Appendix E to Part 1022 of Title 12, which sets forth the Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies. The guidelines clearly mandate that furnishers, such as ECSI, must establish a system for furnishing information about consumers to consumer reporting agencies that is appropriate to the nature, size, complexity, and scope of the furnishers business operations. Specifically, ECSI is obligated to : Establish and implement appropriate internal controls regarding the accuracy and integrity of information about consumers furnished to consumer reporting agencies, such as by implementing standard procedures and verifying random samples of information provided to consumer reporting agencies ( Appendix E ( d ) ).

Provide for appropriate and effective oversight of relevant service providers whose activities may affect the accuracy or integrity of information about consumers furnished to consumer reporting agencies to ensure compliance with the policies and procedures ( Appendix E ( f ) ).

Delete, update, and correct information in its records, as appropriate, to avoid furnishing inaccurate information, which includes information that is misleading in such a way and to such an extent that it can be expected to have an adverse effect on a consumer ( Appendix E ( h ) ).

Conduct reasonable investigations of disputes, as required under 15 U.S.C. 1681s-2 ( b ) ( Appendix E ( i ) ).

Design technological and other means of communication with consumer reporting agencies to prevent duplicative reporting of accounts, erroneous association of information with the wrong consumer ( s ), and other occurrences that may compromise the accuracy or integrity of information provided to consumer reporting agencies ( Appendix E ( j ) ).

The preponderance of evidence demonstrates that ECSI failed to adhere to the required standards and guidelines, highlighting a pattern of noncompliance that constitutes willful misconduct. ECSIs repeated furnishing of facially false and logically inconsistent data to the CRAs, despite being notified of these inaccuracies, indicates a systemic failure to conduct reasonable investigations as required under 15 U.S.C. 1681s-2 ( b ). This pattern of behavior aligns with the definition of willfulness as outlined in the CFPB Advisory Opinion on Consumer Reporting Accuracy, where [ a ] violation [ of the FCRA ] is willful when it is inconsistent with authoritative guidance from a relevant agency ( Consumer Financial Protection Bureau, Advisory Opinion on Consumer Reporting Accuracy, 87 Fed. Reg. 64689, 64691 ( XXXX XXXX, XXXX ), referencing XXXX XXXX. XXXX XXXX XXXX XXXX  XXXX, XXXX XXXX XXXX, XXXX ( XXXX ) ; XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX ( XXXX XXXX XXXXXXXX ) ). Appendix E to Part 1022 is such guidance that ECSI has failed to adhere to.

ECSI 's inadequate response to disputes and their failure to implement necessary internal controls, as mandated by regulatory guidelines, evidences their deliberate noncompliance with the FCRA. This willful disregard for consumer protection law and regulation exposes ECSI to liability for statutory damages, as well as actual and punitive damages, under 15 U.S.C. 1681n and 15 U.S.C. 1681o. 
The FCRA permits recovery for humiliation and mental distress, as well as for reputational and creditworthiness injuries, as outlined in XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX XXXX. XXXX ). Moreover, XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX  XXXX XXXX. XXXX XXXX ( XXXXXXXX XXXX XXXXXXXX ) recognized that emotional distress is a sufficiently concrete injury to support XXXX XXXX standing in an FCRA claim. Likewise, in XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX. XXXX XXXX ( XXXX. XXXX XXXX ), the court affirmed that emotional distress constitutes an injury in fact under the FCRA, even in light of the XXXX decision. Additionally, the XXXX XXXX 's ruling in XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX ), confirmed that statutory damages are recoverable under 15 U.S.C. 1681n ( a ) ( 1 ) ( A ), even in the absence of actual harm, when violations are willful.