08-29-2010 04:56 PM
Each reporting entity is, I agree, basically, a legal subscriber to one or more of the CRAs.
Each CRA has one uniform reporting in their contracts.
In their subscriber agreement they contractually agree to accept guidelines as outlined in the Consumer Data Industry Association's © 2009 version of the Credit Reporting Resource Guide. It is not a recommendation, it is a contract agreement.
I can only make brief quotes from the contract provisions in the credit reporting manual, due to copyright limitations:
“paid, derogatory accounts, such as collections, should be reported paid; they should not be deleted”
“data furnishers should not report subsequent deletion of an account history unless an actual error is reported. Paid derogatory accounts, such as collections, should be reported as paid; they should not be deleted.
One of the finer (and basic) points of contract law is that it is virtually impossible to have an obligation where there is, in fact, no stated obligation. A contractual agreement -- or portions thereof -- that state you should do something vs. you must do something is / are unenforceable as a matter of law in virtually every instance and are, as a result, mere recommendations. The CRAs, obviously, are well aware of this as evidenced, in part, by their use of the word must more often than not in only those instances where it would be a physical impossibility to do other that indicated. For example, "You must use only the two-digit code which signifies the consumer's state" is pretty much an obligation when the field of entry makes it physically impossible to enter anything more or less than two precise characters.
CRAs are also well aware that their subscriber contract is, except for subscriber actions precisely identified in the state penal code, a toothless tiger. CRAs have the technical ability to identify those subscribers and those instances that indicate a PFD has occurred. If there were any sanctions -- which there aren't -- that CRAs could impose, their all-too-well-known failure to do so on a continual basis has pretty much nullified their ability to ever do so should they choose.
It's sort of like someone telling you, "Joe, you should maybe brush your teeth after eating those spicy chili dogs." And if he doesn't, what are you going to do? Take away his birthday?
That OCs / CRAs should not remove an accurate account history is legally nothing more than a recommendation. That it is somehow an obligation is fiction.
10-03-2012 07:13 AM - edited 10-03-2012 07:13 AM
Great post. I really appreciate the explanation between the contractual difference between should and must. I am trying to get my hands on the latest Metro 2 Format, Item E-395 Credit Reporting Resource Guide to see exactly how things are worded.
Sorry to revive and old thread but this was a very educational post.
10-03-2012 09:38 PM
This is a couple of years old. Certainly CAs seem to be doing less PFDs than ever before. Is this because of the CRAs becoming any stricter (or threatening to become) with their terms of service?