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We couldn’t delete it if we wanted to

January 14, 2011

In recent years, I’ve seen a number of cases in which a consumer report about A is pulled by creditor B from the files of reporting agency C, allegedly without A’s permission.  In this post, I’d like to note one weird quirk that can occur when such a situation takes place.

Whenever A’s report is pulled, a record of the “inquiry” is made by C, and the inquiry will appear on future consumer reports issued about A by C.  (When you, the reader, get your report, you’ll see such  inquiries toward the end, as a list of everyone who’s seen your report in the past two years).

Are you with me so far? B pulls A’s report from C, and C makes a record of the inquiry.  But A alleges that B had no permission to pull the report.

Suppose the facts come out, and everyone agrees that B pulled A’s report by mistake.  In such a situation, can C delete the inquiry so that it doesn’t show up on future reports about A?

As written, the FCRA’s answer is NO.  The FCRA states at 15 USC Sec. 1681g(a)(3))A) that every reporting agency must keep a record of every inquiry about every consumer for 2 years (if the inquiry concerned employment) or 1 year (if the inquiry concerned anything else).*  The statutory language makes no exception for mistaken inquiries.

The staff of the FTC noted this quirk in August 2000, when it sent an opinion letter that can be found at http://www.ftc.gov/os/statutes/fcra/cohan2.shtm.  At section 5 of the letter, the FTC argued that a reporting agency must keep a record of every inquiry, mistaken or otherwise, per 15 USC 1681g(a)(3)(A).  If the agency deletes an inquiry to appease a consumer, the agency has just violated the FCRA.  Or so says the FTC.

Some consumers are extremely sensitive to inquiries on their reports; they think that each inquiry depresses their credit score.  (They are sometimes right about that and sometimes not, but that’s a topic for another post).  Unfortunately for such consumers, it appears that they cannot get incorrect inquiries deleted, even if everyone involved agrees that the inquiry was a mistake.  Under the FCRA as written, the reporting agency couldn’t delete the inquiry even if it wanted to.

*  It appears that most reporting agencies keep all inquiries – no matter their purpose – on file for two years.  I don’t think there’s an easy way for the agencies to determine whether an individual inquiry was for employment or for some other purpose.  So they keep a record of all inquiries for the two-year period required for employment inquiries.  15 USC 1681g(a)(3)(A)(i).

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