The 623 credit dispute is a method of disputing a negative account directly with the furnisher of that information on your credit report. The information furnisher is any entity (including collection agencies) reporting information to the credit bureaus about your credit history.
The number 623 pertains to the Fair Credit Reporting Act, particularly, Section 623. (a)(8) Ability of Consumer to Dispute Information Directly with Furnisher.
Since July 1, 2010, the FACT Act requires the furnisher of information to respond to credit disputes within 30 days much like the requirement of the credit bureaus in responding to credit dispute. The 623 dispute method may be a viable alternative to getting erroneous or unconfirmed information removed from your credit reports.
If the furnisher of information does not respond within the 30-day time-frame, the negative item must be removed from your credit report. However, before you dispute with the furnisher of information you must first dispute the negative item with the credit bureaus.
Disputing directly with the furnisher of information requires an investigation be conducted, not a verification. When disputing with credit bureaus the furnisher of information is only required to verify whether the dispute is accurate. An actual investigation is typically never done, although required. (See the E-Oscar Method of Investigation).
This new rule puts the responsibility of investigating disputes on the furnisher which makes them accountable in a whole new way for reporting erroneous information to the credit bureaus. Imagine being reported late multiple times to the credit bureaus but the furnisher of information cannot prove you were late.
Guess what? That may actually be the case. Credit card companies are not in the business of storing information and typically retain records for 18-36 months. If they cannot prove you were late then the negative information must be removed.
Duties of the consumer. Provide the furnisher of information with any supporting documentation related to the dispute. If there is not supporting documentation provide sufficient information so they can investigate the dispute.
Duties of the furnisher of information. An investigation must be conducted along with any information provided by the consumer. If the negative information they are reporting is found to be inaccurate, the furnisher must notify the credit bureaus and have the information corrected. All of this must occur within a 30 day timeframe or the negative information should be deleted.
Frivolous Disputes. The furnisher of information may determine the dispute is frivolous under certain conditions. Using the same reason to dispute the same information can be considered frivolous. Providing insufficient information may also be a reason for determining disputes as frivolous. If your dispute is determined as frivolous the furnisher of information must notify you within 5 days of their determination.
Furnisher of Information Does Not Respond. If the furnisher of information does not comply by investigating the dispute, they are in violation of the Fair Credit Reporting Act and you have the right to sue for that violation. However, you cannot sue the furnisher of information unless you have first disputed the negative information with the credit bureaus.
Disputing with the credit bureau first places the responsibility of accurate reporting directly on the furnisher of information. The credit bureaus should correspond with the furnisher of information and the furnisher should conduct an investigation once the credit bureau notifies them of a dispute. This rarely happens as the furnisher of information will simply verify the information as accurate, without ever conducting an investigation.
When you dispute directly with the furnisher of information you are essentially requesting the records they provided the credit bureaus to verify the original credit dispute made with the credit bureaus. If the furnisher of information does not have the proof but verified the original credit dispute as accurate, then the furnisher of information has committed a violation and you can sue.
A simple 623 dispute letter to the furnisher could say something like this:
I am writing to dispute the 30 day late notations you are reporting on my credit report. I have previously disputed this information with the credit bureau and the result of that investigation was verified as accurate. I have never been late on the account nor have you notified me, as required by the FRCA, that you have inserted negative information on my credit report.
Please provide me with the records and documentation used to verify the negative information as accurate under the dispute made with the credit bureau. This is a request for an investigation as required by the FRCA. If you do not respond within the required timeframe of 30 days you must remove the negative information from my credit reports.