When an account is under investigation, Metro 2® guidance generally expects furnishers to continue reporting the account, but to add the appropriate legal-compliance indicator so the consumer reporting agencies and data users understand the context. The goal is to preserve accuracy, prevent re-aging or “hiding” of adverse information, and document the dispute status in a standardized way.
Definitions and context: “dispute” vs. “fraud”
In Metro 2®, an account “in dispute” can include consumer disputes raised directly to the furnisher (including identity theft concerns) while the furnisher evaluates accuracy and validity. A fraud determination is different: if the investigation confirms the account was opened or used fraudulently, Metro 2® provides a separate, stronger outcome (deletion due to confirmed fraud).
From an FCRA perspective, furnishers have duties to maintain accuracy and to investigate disputes, particularly under FCRA Section 623 (commonly referenced for furnisher responsibilities). Those obligations are operationalized in Metro 2® through standardized codes that communicate dispute status and investigation outcomes.
Step-by-step reporting standard (Metro 2® approach)
- Continue reporting the account as usual
- Keep the account’s standard fields aligned with the actual status as of the Date of Account Information (for example, balances, delinquency level, and payment history logic).
- Add Compliance Condition Code XB during the investigation
- Metro 2® instructs that when the account information has been disputed directly to the furnisher and the furnisher is conducting its investigation, report Compliance Condition Code “XB”.
- After the investigation, take one of three actions
- If the account is valid (not fraudulent): continue normal reporting.
- If months of payment history are invalid: use the Payment History Profile to correct the affected months (do not rely on informal narratives; correct via the standardized history mechanism).
- Remove the dispute indicator: report Compliance Condition Code “XR” to remove the previously reported code, or report “XH” to indicate the investigation has been completed (per Metro 2® guidance).
- If confirmed fraud is established: delete using DF
- If the investigation determines the account was opened or used fraudulently, Metro 2® guidance calls for Account Status “DF” to delete due to confirmed fraud.
Compliance requirements and operational pitfalls
- Do not treat XB as a permanent label. Metro 2® guidance emphasizes that dispute codes must be updated once the investigation is complete (remove or transition the code).
- Avoid “silent corrections.” If payment history is wrong, correct it using the Payment History Profile. This is a key audit trail for accuracy and consistency.
- Keep dispute handling consistent with written procedures. Metro 2® notes that internal policies should govern how long completion indicators are retained and how corrections are applied.
Impact on consumers and credit users
Accurate dispute coding can reduce downstream harm by signaling that certain information is contested while still preserving factual reporting. It also supports more consistent reinvestigation outcomes and reduces repetitive disputes caused by incomplete or unclear reporting.
Conclusion
Metro 2® centers on a simple compliance model: keep reporting the account, flag it with “XB” during investigation, remove or update the code when done, and use “DF” only when fraud is confirmed. This approach supports FCRA-aligned dispute handling while maintaining standardized, machine-readable reporting integrity.