Consumer Reports

What are the statutory damages under the FCRA?

$1,000 per violation or $2,500 per willful violation

What are the requirements for using "prescreening lists"?

1. Before the offer is made, establish the criteria that will be relied upon to make the offer and grant credit or insurance. 2. maintain such criteria on file for a 3 year period beginning on the date the offer was made to each consumer. 3. Include with each written solicitation a statement that: a. Information contained in the consumer's CRA file was used. b. The consumer received the offer because he or she satisfied the criteria for creditworthiness or insurability c. Credit or insurance may not be provided if the consumer doesn't actually meet the criteria d. Consumer may contact the CRA (with a toll free number and address) to tell them not to include them in future prescreening lists.

When are investigations not considered Credit Reports under the FCRA?

1. the employer or its agent complies with the procedures set forth in the act; 2. no credit information is used, and; 3. a summary describing the nature and scope of the inquiry is provided to the employee if an adverse action is taken based on the investigation.

What is a "prescreening list" under the FCRA?

A list from a CRA of consumers who meet certain preestablished criteria.

Consumer Financial Protection Bureau

Part of Dodd-Frank. Put in place to make sure consumers understood financial products.

What are permissible purposes under the FCRA?

1. Comply with a court or federal grand jury subpoena 2. As instructed by the consumer in writing 3. To extend credit as a result of an application from a consumer 4. To review or collection on a consumer account 5. For employment purposes, including hiring and promotion, where the consumer has given written permission 6. Underwriting of insurance as a result of a consumer application 7. When there is a legitimate business need in connection with a business transaction 8. To review a consumer's account to determine whether the consumer continues to meet the terms of the account. 9. To determine a consumer's eligibility for a license or other benefit granted by a government that requires consideration of applicant's financial status. 10. For use by a potential investor or servicer, or current insurer in a valuation or assessment of the credit or prepayment risks associated with a credit obligation. 11. for use by state and local officials in connection with determination of child support payments.

Who is a "User" under the FCRA?

1. Employers who use consumer reports 2. Lendors 3. Insurers 4. Others

Who enforces the FCRA?

1. FTC 2. CFPB 3. State Attorneys General 4. Private right of action

What are the FCRA requirements for use of medical information?

1. If used for an insurance transaction, must have consumer consent or use coded medical information. 2. If used for employment or a credit transaction, consumer must provide specific written consent and information must be relevant. 3. User cannot disclose to any other person except to carry out the purpose for which it was disclosed, or as permitted by law.

When are employee investigations not a consumer report under the FCRA and FACTA?

1. Made in connection with investigation of a suspected misconduct related to employment or compliance with law or internal rules; 2. Communication is not made for investigating creditworthiness; and 3. Communication only provided to employer or agent, government or self-regulatory authority.

What are the FCRA requirements for loans secured by residential real property?

1. Must provide credit scores and other related information 2. May need to provide a risk-based pricing notice if a consumer report is used in connection with an application for credit on terms less favorable than the most favorable terms available to a substantial proportion of consumers acquiring loans from that person.

Requirements for Credit Reporting Agencies?

1. Provide consumers with access to the information contained in their consumer reports, as well as the opportunity to dispute any inaccurate information 2. Take reasonable steps to ensure the maximum possible accuracy of information in the consumer report. 3. Not report negative information that is outdated; in most cases this means account data more than seven years old or bankruptcies more than 10 years old. 4. Provide consumer reports only to entities that have a permissible purpose under the FCRA. 5. Maintain records regarding entities that received consumer reports. 6. Provide consumer assistance as required by FTC rules.

What are the disclosure requirements for an Investigative Consumer Report?

1. The consumer must be informed that an investigative consumer report may be obtained. 2. the disclosure must be in writing and must be mailed or otherwise delivered to the consumer some time before but not later than 3 days after the date the report was first requested. 3. disclosure must include a statement informing the consumer of his/her right to request additional disclosures of the nature and scope of the investigation, and the summary of consumer rights required by the FCRA. 4. User must certify to the CRA that the required disclosures have been made to the consumer. 5. Upon written request of a consumer within a reasonable time after the disclosures, the user must make a complete disclosure of the nature and scope of the investigation. 6. Nature and scope of disclosure must be made in a written statement that is mailed or delivered no later than 5 days after receipt of the consumer request or the report first requested, whichever is later.

Requirements for users of consumer reports?

1. Third party data for substantive decision making must be appropriately accurate, current and complete. 2. Consumers must receive notice when third-party data is used to make adverse decisions about them. 3. Consumer reports may be used only for permissible purposes and must certify to CRA.. 4. Consumers must have access to their consumer reports and an opportunity to dispute them or correct any errors.

Contents of adverse action notification under FCRA?

1. name, address and toll-free telephone number of the CRA that provided the report. 2. Statement that the CRA did not make the adverse decision and is not able to explain the decision. 3. Statement setting forth the consumer's right to obtain a free disclosure of the consumer's file from the CRA, if requested within 60 days. 4. Statement setting forth the consumer's right to dispute directly with the CRA the accuracy or completeness of any information provided by the CRA.

Consumer Report Definition

Any communication by a CRA related to an individual that pertains to the person's (list of factors) and that is used in whole or in part for the purpose of serving as a factor in establishing a consumer's eligibility for credit, insurance, employment or other business purpose.

CFPB Definition of Abusive Act or Practice

Anything that materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service or takes unreasonable advantage of: 1. a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service; 2. The inability of the consumer to protect its interests in selecting or using a consumer financial product or service; or 3. The reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

Who has rule-making authority for the FCRA?

CFPB

What is an Investigative Consumer Report?

Contain information about a consumer's character, general reputation, personal characteristics and mode of living that is obtained through personal interviews by an entity or person that is a CRA.

Consumer Report topics

Creditworthiness Credit standing Credit capacity Character General reputation Personal characteristics Mode of living

How did the Fair and Accurate Credit Transaction Act modify the FCRA?

If certain conditions are met the employer is no longer required to notify an employee that it is obtaining an investigative consumer report from an outside organization during an internal investigation.

What rights do consumers have for adverse actions based on information from non CRAs?

If information that is relied on is the type of information covered by the CRA, the user must disclose the consumer's right to be informed of the nature of the information relied upon if requested within 60 days.

What rights do consumers have for adverse actions based on information provided by affiliates?

If involves insurance, employment or a credit transaction and information that is relied on is the type of information covered by the CRA and provided by an affiliate, the user must disclose the consumer's right to be informed of the nature of the information relied upon if requested within 60 days. Disclosure must take place within 30 days of receipt of request.