Most often, the bureaucrat codes the CDV/ACDV using a two-digit identifier, which simply indicates that the consumer disputes the validity of the entry, which may be account information (a trade line, as it is known in the industry) or public record information. And while there are several different two-digit codes, one could mean “not mine,” while another could mean, “wrong balance,” for example. When the furnisher receives the CDV/ACDV from the bureau, someone-with similar skills to those of the bureau letter handler, and who would likewise have quotas to meet-is tasked with one single thing: confirming whether the last information they provided to the credit bureau matches the information the furnisher currently has in its computer database. If so, then the disputed entry is affirmed as correct. If not, then the data is resubmitted to the credit bureau as reflected in the furnisher’s database. The bureau will always defer to the furnisher, reporting whatever the furnisher instructs. (This illustrates the importance of getting a creditor on board to report desirably, even when an account is seriously delinquent.)
Now I ask you, just where in this dispute scenario might someone who has fraudulently obtained new credit using someone else’s identity be discovered? And more importantly, where in this scenario does a victim of identity theft have any adequate recourse? The answer is nowhere. If the identity thief is granted new credit by using the victim’s SSN (the consumer’s identity, for all practical purposes), then this new credit is reported to the credit bureaus-eventually as a delinquent account when the thief fails to pay the duped creditor. When the victim attempts to dispute the information with a credit reporting agency, the bureau will contact the furnisher and request verification. The dispute handler at the furnisher will then verify the debt as valid and owed by the victim. And therein lies the key to why identity theft is such a growing and attractive crime: the credit bureaus perpetuate it, since there is no mechanism within the furnisher-bureau interface to deal with it.
Trans Union reports that 52 percent of its data furnishers participate in the ACDV system. This does not bode well for consumers, but on the on the upside, FACTA has provisions to assist consumers with combating identity theft.