Credit dispute investigations usually involve the furnisher (or creditor) comparing the information in their computers to what is reported in a consumer’s credit file.
Typically the bureau accepts what the furnishing company tells them. This is referred to as “parroting,” as the reporting agency is simply repeating what the furnisher has said. There is no additional investigation to review records or contact the consumer.
The automated dispute system is designed to convert the detailed reporting information into a simple three-digit code and a couple of lines of narrative. There is a standard form which all three reporting agencies use for this process called the Consumer Dispute Verification form (CDV).
If the form is submitted electronically, it is known as an Automated Consumer Dispute Verification (ACDV) form. The ACDV form consists of a few pieces of information: the consumer’s identifying information, the codes which summarize the dispute, and sometimes a couple of lines of narrative.
The credit bureaus’ e-OSCAR system (Online Solution for Complete and Accurate Reporting) offers 26 available dispute codes: not his/hers, account closed, account paid as agreed, etc. These codes are what drive the system, yet they are inadequate in many instances to convey a complete picture of the actual dispute.
The investigation is initiated by the credit bureau by sending the CDV through the automated processing system called e-OSCAR. Despite the fact that the consumer has most likely sent in supporting documentation and a detailed description of the dispute, a three-digit code is all that is actually transmitted to the reporting agency.
It should be noted that the employees who do the coding are not instructed to do anything, but locate the code which best describes the dispute. They are not required, nor encouraged, to read all of the attached documentation or attempt to analyze the situation.
What makes matters worse, is there were originally 100 codes, but they were reduced to only 26. And out of the 26 codes, the credit bureaus actually assign almost 85% of the disputes to only five of the 26 available codes.
Take a look at these most commonly used codes:
|Disputes present/previous account status/history||21.2%|
|Claims inaccurate information. Did not provide specific dispute||16.8%|
|Claims account closed by consumer||7.0%|