Every hour, trillions of pieces of data are managed, transferred and handled by U.S. banks. Our country's financial health depends on the trust of bank customers in the accuracy of bank transactions. Federal consumer protection laws forbid the acceptance of unreliable credit data and penalize entities that provide defective credit information.
When banks sell portfolios containing thousands of accounts, it's standard practice not to warrant the accuracy of 100% of the data. Like a flowing stream, data change from moment to moment: People move, change phone numbers, make payments or file bankruptcy. This makes a strict warranty impossible.
The critical pieces — the customer's identity and payment history — are already required by law to be accurate. A warranty is not needed when the law already demands complete accuracy. As for data that change constantly, a demand that banks guarantee 100% accuracy at the instant of sale is simply unrealistic.
Debt buyers and collection agencies use sophisticated procedures and technology to ensure the accuracy of a bank's data. Ethical debt buyers and collectors work hard to have the right data every single time, not altruistically, but because they face suits and regulatory consequences when they are wrong.
State and federal laws empower consumers to require debt buyers and their collectors to validate a debt as a condition of collection. Credit reporting agencies have automated procedures to let consumers dispute inaccurate credit reports. It takes just seconds on the Internet to find one of the many consumer attorneys who are glad to sue lenders, debt buyers and other collectors who step out of line.
As long as human beings are involved, it is certain that mistakes will happen, but effective remedies exist to correct them. Just as most consumers are honest and intended to pay their bills, most of their transactions are accurately recorded by the banks. Losing faith in that proposition means losing faith in our entire credit system, with potentially incalculable impact.
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