Disputing Credit Reports
Why you should never ever use e-OSCAR
to file your disputes!

The Credit Bureaus Online Dispute System

Speaking of disputing credit reports...you may have noticed when you received your credit reports from the credit bureaus, they encourage you to go to their website to dispute any inaccurate credit items. When disputing credit reports, they want you to file your disputes online because it actually benefits the credit bureaus, not you. Although it's true that it may be more convenient than writing a credit bureau dispute letter, it actually limits your legal rights and works to your disadvantage.

When disputing credit reports online, here's what happens. First, you log into the credit bureau's automated dispute system called e-OSCAR which stands for electronic Online Solution for Complete and Accurate Reporting. You then select from their list of reasons for your dispute. Each dispute type is tied to a 2 to 3 digit investigation code in the credit bureau's system. There are a limited number of dispute codes to choose from. Recently the credit bureaus reduced their number of codes from 100 to 26.

When disputing credit reports online, you don't have an option to write a detailed explanation of the reason for your dispute. Basically, your online dispute must fit neatly into one of the categories pre-set by the credit bureaus. What if there are special circumstances surrounding your dispute?

According to testimony provided in congressional hearings, credit bureaus used the same 4 to 5 dispute codes for 83% of the disputes filed:

Can the dispute reason "Inaccurate Information" really adequately describe a dispute resulting from a collection company reporting an account as delinquent when you have a receipt and a letter from the original creditor showing it was paid before it went to collections?

"Offline Dispute"

By disputing credit reports online there is no opportunity for you to attach any relevant information to your dispute. The "offline" FCRA dispute procedure requires the credit bureaus to forward "all relevant information" provided by the consumer to your creditor when you file a dispute. When disputing credit reports online, you give up this legal right. So you can't submit a copy of your cancelled check, billing statement, or a letter documenting your settlement agreement.

Consider the fact that the FCRA requires the credit bureaus to respond to your dispute within 30 days or the disputed item must be deleted. When you file your dispute online, the credit bureau electronically forwards your dispute to your creditor or the furnisher of information instantly.

According to lawsuit deposition testimony of credit card company employees, the automated dispute system simply matches certain information like your name, social security number, and account number to the same information provided by the credit bureaus in your automated dispute and their system "verifies" the credit item you disputed.

In other words, not only does the automated dispute system make it easier for the credit bureaus to respond faster to meet their 30 day time limit imposed by the FCRA, but it gives the creditors a way to do a limited "verification" without performing a real re-investigation of your dispute as required by the FCRA.

Many creditors abuse the automated dispute system by simply "parroting" the disputed information the credit bureaus send electronically and they don't actually perform a re-investigation as required by the FCRA. They simply confirm that the information in their system matches the information in the credit bureau records that you disputed.

So if you dispute a credit card charge off, the automated dispute system simply confirms that it's your account and automatically sends the credit bureau a response that the reported credit item has been "verified". But what if the account is actually yours but it wasn't a charge off?

You receive a system generated form letter in the mail from the credit bureau stating "the item you disputed was re-investigated and the creditor has 'verified' that the item is being reported accurately". But no human actually even reviewed your dispute!

No Paper Trail

By disputing credit reports online you don't create a paper trail of your correspondence to the credit bureaus. So when you're ready to take further legal action because of their violation of the FCRA, you lack proper documentation.

Finally, section 611a(8) of the FCRA specifically limits your legal protections when disputing credit reports online using the credit bureaus' online dispute process.

The "Expeditious Dispute Resolution" section states "the agency shall not be required to comply with paragraphs 2, 6, and 7 with respect to that dispute if they delete the trade line within 3 days".

Let's take a closer look at what legal protections you give up when you use their online dispute system:

• Paragraph 2 requires the credit reporting agency to forward your dispute, and all relevant information you provide, to the creditor.
• Paragraph 6 requires the credit reporting agency to provide you with written results.
• Paragraph 7 requires the credit reporting agency to provide you with the method of verification on request from the consumer.

So basically, when disputing credit reports online using the credit bureaus' automated dispute system, the credit bureaus are off the hook for complying with paragraphs 2,6 and 7. They no longer have to forward any relevant documentation you provide to the creditor. They don't have to notify you in writing of the results of their re-investigation and they don't have to tell you what method they used to verify the credit items you dispute.

Here's how the credit bureaus use this section to their benefit and to your disadvantage. First the credit bureaus comply with this section of the FCRA by deleting your disputed credit item within 3 days. At this point they no longer have to forward the dispute to the creditor.

The next month your creditor will update your credit item with the credit bureau automatically as they normally do each month. The updated credit information will basically re-report the same negative item you disputed and you will never know all of this happened because they don't have to give you the results of the re-investigation under this section.

You Waive Your Protection When You File Online

Ordinarily, the credit bureau is required to give you special notice and provide certain certifications when they re-report a credit item that was previously deleted. But this protection is waived when you file your dispute online. So the item can be deleted within the 3 days of your dispute and re-reported without you even knowing.

This information is publically available, but rarely publicized. So when the credit bureaus state they provide an online dispute process for your convenience, is it really for your benefit or theirs?