When a credit dispute is verified as accurate make sure you challenge the results. Your dispute may not have been properly investigated due to the credit bureaus’ use of the e-Oscar system.
The e-OSCAR method of investigating credit disputes may be the reason your credit dispute was verified when you are positive a mistake has occurred.
Credit reporting agencies have created an automated, computerized system of dealing with consumer credit disputes. When a consumer submits a credit dispute, that dispute is reduced to a two or three digit code that characterizes the nature of the dispute.
Even when consumers submit supporting documentation, the e-Oscar system is used. That means submitted proof may not be reviewed and the furnisher of information only verifies the code as accurate or inaccurate.
What is e-Oscar
The e-OSCAR system (Online Solution for Complete and Accurate Reporting) began in 1993 and is owned by 4 companies – Equifax, Experian, Innovis, and TransUnion. The e-OSCAR system enables consumer reporting agencies to create and respond to consumer credit history disputes automatically, without conducting any real investigation.
Think of e-Oscar as an electronic referral and response system where creditors, debt collectors and any other furnishers of information can quickly respond to credit bureau disputes.
With e-Oscar consumer disputes are converted into a two or three digit code. It eliminates the consumer reporting agencies’ responsibility to conduct actual dispute investigations in compliance with the Fair Credit Reporting Act (FCRA).
e-Oscar involves using a consumer dispute verification form
Consumer reporting agencies use a form called Consumer Dispute Verification (CDV) to communicate disputes to data furnishers. Data furnishers can be original creditors, debt collectors or any other entity that reports information to your credit files.
The automated version of the form is called Automated Consumer Dispute Verification (ACDV). The process by which the credit bureaus open an investigation with the original creditor or furnisher of the information is by transmitting the ACDV via the e-Oscar system.
How e-Oscar Works
- The consumer reporting agency receives a dispute letter from the consumer.
- Employee at the consumer reporting agency reads the letter and selects a dispute code from among several specific codes offered by the e-Oscar system.
- The ACDV transmitted to the data furnisher consists of consumer identifying information; the e-Oscar code(s) summarizing the consumer’s dispute and in some cases a one or two line narrative to supplement the dispute code.
Why e-Oscar is problematic
Consumer credit disputes can be unique and complex. Many dispute letters are accompanied by supporting documents and proof which is imperative to getting an error corrected. The e-Oscar method of investigation reduces often detailed credit disputes to a two or three digit code by an overworked, time constricted credit bureau employee.
It’s totally in the credit reporting agency employee’s discretion on what code best describes the dispute – this is problematic.
The e-Oscar code is transmitted to the data furnisher and the supporting documentation may or may not have been submitted. That supporting documentation is crucial to correcting errors. It’s often conclusive proof that an error has occurred.
This practice is a direct violation of the Fair Credit Reporting Act. No real investigation is ever conducted.
To make matters worse, out of the numerous possible codes the credit reporting agencies can use, they end up using the same 4 codes for “nearly 90% of all disputes.” The percentage breakdown of commonly used codes looks like this:
- Not his/hers 30.5%
- Disputes present/previous Account Status/History 21.2%
- Claims Inaccurate Information. Did not provide specific dispute 16.8%
- Disputes amounts. 8.8%
- Claims account closed by consumer. 7.0%
This information comes from written testimony before the House Committee on Financial Services regarding “Fair Credit Reporting Act: How it Functions for Consumers and the Economy” submitted by Leonard A. Bennett of Consumer Litigation Associates on June 19, 2007. See the full report here.
Take a look at the full list of e-Oscar dispute codes.
Results of E-Oscar Disputes
Often consumers get the results of an investigation stating the account was verified by the creditor without any details of the investigation. There is no information on who was contacted and what information was obtained to verify the account as accurate.
Because of the e-Oscar system consumers get frustrated with the dispute process and sometimes give up.
But don’t you give up! Exercise your rights under FCRA, Section 611 (a)(6) and (7) and request the credit reporting agency give you the “Method of Verification.”
Changes to e-Oscar
In a December 2012 report, the Consumer Financial Protection Bureau (CFPB) reviewed how the “e-OSCAR” system did not provide a means for credit bureaus to forward to furnishers (anyone who provides information to the credit bureaus) any documents submitted by consumers.
The CFPB has been working to ensure the dispute process be improved and as a result, the “e-OSCAR” system has been upgraded so that the credit bureaus can now send furnishers any relevant dispute documents submitted by consumers.
The CFPB continues to work with consumer reporting agencies to ensure the dispute process is improved on behalf of consumers. Additionally, more employees have been provided by the consumer reporting agencies to review disputes and responses by data furnishers.
As you can see credit repair can be complex and may call for several strategies, knowledge of credit laws and patience. Sometimes you have to let the professionals handle your credit repair needs.