What Your Business Needs To Know About The Fair Credit Reporting ActThe Fair Credit Reporting Act affects every business. It is the means by which the FTC requires businesses to report only accurate information regarding the debts owed to the company by a debtor. Every business owner handling in house collections needs to fully understand The Fair Credit Reporting Act. Organizations that fail to adhere to these laws might be risking costly fines. And in some cases, debts owed to them could be discharged. Debt collection is a difficult process. However, it is very important for any business handling debt collections to fully understand the law. The Fair Credit Reporting Act Explained A business needs to understand the Fair Credit Reporting Act. This act states that consumers have the right to verify the information on their credit report. It also states that businesses must ensure that the information on these reports is accurate to the best of their ability. It is essential the business understand this part of debt collection. If your business receives a complaint from one of the national credit bureaus (Equifax, Experian or TransUnion), you have a 30-day period to verify the accuracy of the alleged debt owed, or it has to be removed off the individual's credit report, as per The Fair Credit Reporting Act. In regards to debt collection, The Fair Credit Reporting Act is crucial to understand. If you file an inaccurate claim, you face possible legal ramifications if done so intentionally. Moreover, The FTC can possibly limit your abilities to file future claims. The Fair Credit Reporting Act works to the benefit of your business as well. As long as information about the debt is reported correctly, it should be used by the business to make sure other businesses know of this individual's failure to pay their debt. Other businesses will certainly want to know what to expect from a potential customer before working with them. Important Facts For any businesses or associates handling debt collection, there is much to know about the Fair Credit Reporting Act. Businesses that supply information to the consumer reporting agencies are responsible for submitting only accurate information. The law was updated to expand the rights of the consumer. Consumers have the right to know what is contained in their credit report. They can file a request with the credit reporting agencies. During that process, if it contains any information deemed inaccurate, such as missing or wrong account information, debt collection activity, or erroneous history, the business has to offer proof of the accuracy of the debt, or it has to be removed from the credit report. The Fair Credit Reporting Act places this burden of proof on the business claiming the owed debt. Negative information on these consumer reports can remain for up to seven years. Bankruptcies are an exception, in that they will remain for ten years. Criminal convictions, information reported in response to an application for a job with a salary that is higher than $75,000 or any information in regards to an application of more than $150,000 can remain for the lifetime on the report. Understanding the requirements of the business to file only accurate information due to the Fair Credit Reporting Act is critical for any business owner, noting debt collection or other requirements. David P. Montana has been a renowned industry expert, business advisor and writer in commercial debt collection services for thirty years. He provides additional tools and information on debt collection laws.
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