What is a frivolous credit card dispute?
The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
Your credit score is an important part of your financial life, impacting your ability to buy a home or rent an apartment — even your prospects of landing a job. With so much on the line, it’s no wonder consumers don’t want to see inaccuracies on their credit reports.
However, it seems lenders that report on your accounts to credit reporting companies don’t always provide accurate information. The Consumer Financial Protection Bureau reports that some lenders are running afoul of the Fair Credit Reporting Act by reporting information that they had reason to believe was not accurate. The FCRA gives consumers the right to file a dispute about a credit reporting inaccuracy.
Lenders should investigate disputes filed by consumers
If a consumer files a dispute with a credit reporting bureau, it can forward it to the lender involved for investigation.
A consumer can also directly file a dispute with a lender related to any information about a reported account impacting the consumer’s character, reputation or creditworthiness. A consumer may also file a dispute with a lender relating to their liability for a credit account, such as whether someone used their credit card fraudulently.
You may also dispute the terms of the account or performance related to the account, such as whether you made your payment.
What is a frivolous dispute?
Generally, if you follow the proper dispute procedure and send in your dispute letter, along with supporting documents, to the address the lender provides for submitting disputes, the law requires the lender to conduct a timely investigation into the matter.
However, the lender could, if it has sufficient cause, dismiss your dispute as frivolous or irrelevant and not conduct an investigation. This could happen if you did not provide the lender sufficient information to conduct an investigation into the matter.
For instance, say you did not provide your account number and other required personal information. Or it may be that you did not explain what you are disputing and why. It could be that you did not provide the lender with the supporting documentation necessary to carry out an investigation. For instance, you may not have provided that part of the consumer report containing the information you are disputing, or you omitted submitting an affidavit about a fraud issue.
A lender could also deem a dispute submission to be frivolous if it is pretty much the same as one you had previously filed. That applies if you filed a previous dispute that is “substantially the same,” directly with the lender or with a credit reporting bureau. However, if you file a dispute report providing required information that your “substantially the same” previous dispute submission did not have, the lender cannot dismiss it as a frivolous dispute.
Credit repair submissions can be dismissed as frivolous
There are other reasons why a lender can dismiss your dispute submission. For one, if a credit repair agency submits it on your behalf, or prepares it for you, it won’t pass muster. You should also not use a form that a credit repair firm provides to submit your dispute.
A lender also doesn’t have to investigate your dispute if it relates to the following:
- A consumer’s identifying information (such as name, date of birth, address, Social Security number and telephone number) unless it relates to a matter of your liability relating to a matter such as identity theft
- The identity of your employers, either past or present
- Your request for a consumer report
- Input based on information from public records, such as liens and judgments (unless such information is provided by a lender with which you have an account)
- Information related to fraud alerts or active duty alerts (for those in the military)
- Input that another lender provided a credit reporting agency
What to do about frivolous dispute dismissal
Once a lender deems your dispute submission to be frivolous, it should send you notice within five business days of determining this. The notice should provide information about the reason for deeming your dispute submission to be frivolous. It should also specify if you need to submit additional input for the lender to investigate the matter.
In case a lender dismisses your dispute as a frivolous one, you should follow up with the lender. And if the dismissal is based on a finding of insufficient input, you should provide any additional input the lender asks for. Further, if you don’t think your dispute is a frivolous one, based on the criteria for frivolous dismissal, you could file a complaint with the CFPB.
If you believe that you have adequate cause, you could even take legal recourse and turn to an attorney. If you prevail in court, you could be awarded damages for your actual loss, as well as punitive damages that punish the lender. In addition, the lender could be held responsible for your attorney fees.
The bottom line
The Fair Credit Reporting Act holds lenders responsible to provide accurate input on your account to credit reporting bureaus. In case you see any input on your credit report that you think is not correct and would impact your credit standing or character, you should dispute the matter with the lender that provided the input.
The lender could dismiss your dispute as a frivolous one if it has sufficient cause (based on certain defined criteria) to believe this. If you don’t agree with this determination, after following up with the lender, you could file a complaint with the CFPB or even seek legal recourse.