In the US, when reporting unpaid claims to a credit bureau, may creditors also report claims where there is a factual dispute? For example, if I order something online, then do not pay the invoice because the goods I received were damaged, and instead complain to the seller - can the seller still report this as an outstanding debt?

In Germany, this is explicitly illegal (Bundesdatenschutzgesetz §28a), claims may only be reported if they are not in dispute, or confirmed by a court. This seems like a sensible precaution, because otherwise companies can report unpaid claims they are not really entitled to.

What is the legal situation in the US? And what are the remedies if an unjustified claim is reported?

  • Note: I tried an internet search to learn more, but searching usually only yields results for disputing factual errors (such as wrong addresses) in the credit report, not for cases where the claim itself is factually correct, but in dispute.
    – sleske
    Oct 1, 2021 at 6:05
  • So you mean a person acknowledges that they ordered and received the goods but didn't like then, and disagrees with the no-returns policy in the sales contract? I am having a hard time understanding what it means to "dispute" a charge when the facts are true.
    – user6726
    Oct 1, 2021 at 14:30
  • @user6726: No, not just "didn't like them", but "were damaged" - in that case payment would not be due, because you generally only need to pay if you receive what you ordered (in this case, an undamaged product). I just used it as an example of a case where it is not clear (without a court judgement) whether there even is a debt.
    – sleske
    Oct 1, 2021 at 14:59
  • Thus your comment above about "cases where the claim itself is factually correct, but in dispute" is confusing. Your example seems to be about a factual dispute as to whether the vendor did what they contracted to do.
    – user6726
    Oct 1, 2021 at 15:09
  • If the consumer disputes that debt is valid that is a "factual dispute". That would include claims that goods orders were never delivered, that the wrong goods were delivered, or that the goods were damaged or non-working at the tiem of delivery. I think the OP misunderstands the term "factual dispute" as applying only to the identity of the ]alleged debtor. Oct 1, 2021 at 15:26

1 Answer 1



A creditor (or alleged creditor) in the US may report such a debt, but must include in the report the information that the debt is disputed, if the creditor has been informed in writing that there is a dispute.

If the consumer disputes that debt is valid that is a "factual dispute". That would include claims that goods ordered were never delivered, that the wrong goods were delivered, or that the goods were damaged or non-working at the time of delivery.

One relevant law is the Fair Credit Reporting Act. Under § 611 of the act (15 U.S.C. § 1681i) a consumer may file a notice of dispute with a credit reporting agency (CRA). The CRA must re investigate the issue, and may ask for confirming information from the merchant or other person who initially reported the information (known as the "Furnisher" in the law). There is a set of procedures for handliung such disputes. Information found to be "Inaccurate or Unverifiable" must be removed. Subsections (b) and (c) of thsi section provife that:

Statement of dispute. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.

(c) Notification of consumer dispute in subsequent consumer reports. Whenever a statement of a dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the consumer reporting agency shall, in any subsequent report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer’s statement or a clear and accurate codification or summary thereof.

Section 616 of the act (15 U.S.C. § 1681n]) provides penalties for wilful noncompliance, and section 617 of the act (15 U.S.C. § 1681o]) provides penalties for negligent noncompliance. These include for wilful noncompliance actual damages, statutory damages of up to $1,000, punitive damages if the court thinks such proper, and "the costs of the action together with reasonable attorney’s fees" for winning cases. For negligent noncompliance actual damages plus costs and reasonable attorney’s fees are allowed.

See also the Wikipedia Article on the Acty, "Summaries of Rights Under the Fair Credit Reporting Act (Regulation V)" from the Federal Register, and "Understanding the Fair Credit Reporting Act" from Experian (a major credit reporting agency).

15 U.S. Code § 1692g which is part of the Fair Debt Collection Practices Act provides that if a consumer notifies a collector within 30 days of the initial debt collection attempt that the debt is disputed, collection attempts must cease until the collector verifies the debt, or obtains a certification from the creditor.

Section 807(8) of the FDCPA (15 USC 1692f) prohibits:

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

See also "Dealing with Debt Collectors: What You Should Know"

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