What must a consumer reporting agency do if a consumer disputes information in their file?

A consumer reporting agency must conduct a reasonable investigation when a consumer disputes information in their file. This requirement is outlined in the Fair Credit Reporting Act (FCRA), which aims to ensure that consumer information is accurate and fair.

When a dispute is raised, the agency is obligated to look into the accuracy of the reported information and must do so within a specified time frame, typically within 30 days. The investigation allows the agency to verify the information with the original source, ensuring that consumers have the opportunity to correct inaccuracies that may affect their creditworthiness.

Immediate removal of information is not mandatory as the agency must first investigate before taking any actions regarding the disputed item. Ignoring the dispute contradicts the FCRA's purpose of maintaining accurate consumer records. Lastly, notifying the consumer only if the outcome is favorable would not comply with the FCRA's requirement to inform consumers about the results of their dispute, regardless of the outcome. Thus, the obligation to conduct a reasonable investigation upholds the integrity of consumer reporting practices.