Credit reporting expert shares five deadliest mistakes when responding to a dispute

AutoStar Solutions' Richard Hudson details what every auto dealer and lender must know to avoid credit reporting crackdown from lawyers, regulators and capital providers.

Jul 02, 2015, 08:00 ET from AutoStar Solutions

FORT WORTH, Texas, July 2, 2015 /PRNewswire-USNewswire/ -- It all started with the Consumer Financial Protection Bureau's high-profile enforcement actions against a well-known auto lender and a large buy-here-pay-here dealer group. Then state regulators jumped on the bandwagon. Plaintiff's lawyers are next, along with trickle-down pressure from capital sources, floor plan providers and credit reporting agencies – who are all feeling the heat.

Richard Hudson, Director of Customer Success at AutoStar Solutions, said he believes credit reporting is the single-biggest compliance issue facing dealers and lenders today. "Five years ago, it was acceptable for credit reporting to be last on your list of worries, but that's no longer the case. The CFPB has imposed their will directly on credit reporting agencies, finance sources and other providers. They, in turn, are holding dealers and lenders accountable," said Hudson, who will lead several credit reporting classes at Innovate 2015: The Independent Dealer Industry Conference, Sept. 20-23, in Fort Worth, Texas. "It's no longer a topic that can be overlooked simply because you're not one of the larger participants in the market. Everyone is affected in some shape or form."

So what should an auto dealer or lender do after being notified of a dispute with data they provided to the credit reporting bureaus? Hudson said that, other than reporting accurately, a furnisher's most important obligation is to respond appropriately to disputes. He shared the five most common – and deadliest – mistakes dealers and lenders make in this area:

  1. Untrained staff – Credit reporting now carries much greater consequences than in years past, and it should be treated accordingly. Hudson recommends training at least two times a year. Industry requirements change rapidly, so processes must be updated just as fast.

    The Consumer Data Industry Association offers comprehensive training specifically for furnishers. Annual trade shows like Innovate: The Independent Dealer Industry Conference also offer multiple courses on this subject.
  2. Not documenting a process that meets "reasonable procedures" guideline – To avoid this mistake, identify existing practices or policies that can compromise the accuracy or integrity of furnished data. For example, if a vehicle is voluntarily repossessed, indicate that so it doesn't show as a charge-off on the consumer's credit report.
  3. Taking too long to respond – You must complete your investigation of a dispute within 30 days from the date the consumer filed. If not, you may be liable to the consumer for the amount of actual damages in addition to punitive damages.
  4. Adopting procedures that don't match the scope, size and complexity of your business – As your business evolves, so should your procedures. At least once per quarter, review the changes to your business over the last several months and assess whether your procedures need to be updated as a result.
  5. Being unaware of all your responsibilities as a furnisher – This is often the result of not enough training. Key responsibilities include: a) not reporting information you know or have cause to believe is inaccurate, b) correcting and updating information, c) providing notice of dispute, d) reporting the date of first delinquency within 90 days of reporting any derogatory information.

To get more detailed, real-world knowledge on credit reporting, join Hudson and the most-respected legal experts in the country at Innovate: The Independent Dealer Industry Conference, Sept. 20-23 in Fort Worth, Texas. The show will feature more than 80 different classes – all more than 1 hour long – that dive deep into compliance, collections, finance, accounting, operations and more.

Innovate is the only show for independent dealers and lenders with two full compliance tracks, which by themselves cover 16-20 different topics. In total, attendees will access more than $10,000 in legal insight for the price of admission.

AutoStar and DealerSocket, its parent company, expect more than 600 attendees at this year's conference, including major exhibitors and financial institutions that will showcase the latest dealership technology, best practices and industry solutions.

To view the full schedule or buy tickets, visit Attendees registered before June 30 will receive $50 off.

About AutoStar Solutions
For more than 20 years, AutoStar Solutions has provided dealer management software solutions to independent automotive dealers and subprime finance companies in the United States. Their web-based software helps clients automate and simplify activities, while maximizing compliance with state and federal regulations. Learn more at

About DealerSocket
DealerSocket provides dealerships with a single automotive platform containing marketing, sales, service, customer experience, and data mining solutions. More than 189,300 users at over 6,500 auto dealerships throughout the U.S., Canada, and Australia are optimizing their dealership with in-depth statistics to save critical time and money, while increasing sales and staff effectiveness, all powered through DealerSocket. For more information, call 775-473-6622, visit, join us on, follow us on Twitter at @DealerSocket, or like us at

CONTACT: Jessica Satterfield, 940-365-1586,


SOURCE AutoStar Solutions