Consumer Privacy Protection

Adverse Actions

-according to the FCRA, if a company uses a consumer report to deny an application for credit, insurance, or employment, or to take similar adverse actions (such as canceling an insurance policy), the company must notify the affected person -report must include the name, address, and phone number of the reporting agency that provided the consumer report

Free File Disclosure

-available if someone has taken adverse action against him because of information in his file -customer is a victim of identity theft and places a fraud alert in his file -file contains inaccurate information because of fraud -customer is on public assistance -customer is unemployed but expects to apply for a job within 60 days -customer also has the right to dispute incomplete or inaccurate information in his file, and the reporting agency is required to investigate it, unless the dispute is frivolous -if the agency does find errors during this investigation, it must correct them, usually within 30 days

Consumer Rights

-customer has the right to know what's in his file -know when adverse action is taken against him because of this information -dispute incomplete or inaccurate information -reporting agency must make necessary corrections within 30 days of consumer's request

Consumer Privacy Protection

-ensures that insurers and their agents do not misuse sensitive personal information -laws regulate how insurers and other companies collect and handle personal information

Consumer Election to be Removed from "Prescreened" Solicitation Lists

-if a person is over 21, a company is allowed to pull a partial consumer report on him, consisting of a very limited amount of information, and use it to initiate a firm offer of credit or insurance -a customer may request that his name and address be taken off the contact lists that these companies use to solicit their business -reporting agencies must maintain a notification system to accept and manage such requests from consumers -when someone asks a reporting agency to remove his name and address from credit or insurance sales lists, the agency must comply within 5 days, and the request remains in effect for 5 years, or until the person otherwise notifies the agency

Security Freeze

-prohibits any reporting agency from releasing the person's credit report in connection with a new credit application without his authorization -doesn't apply to an entity with which a consumer already has open accounts -entities are allowed to get a credit report on a current customer for the purpose of account maintenance, monitoring, collections, credit line increases, etc -a security freeze doesn't prohibit a government agency from pulling a consumer report in connection with a court order, warrant, subpoena, child support case, or fraud investigation -requires consumer's consent before a reporting agency can release his consumer report -remains on consumer's file until he requests removal

Fair Credit Reporting Act (FCRA)

-regulates how companies collect, share, and use consumers' personal and financial information -also promotes the accuracy, fairness, and privacy of personal information maintained by consumer reporting agencies

Fraud Alert

-requires creditors to take extra steps to verify applicant's identity before giving him credit -initial fraud alert lasts for 1 year -if a result of identity theft, fraud alert lasts for 7 years

Consumer Report

1) Any form of communication from a consumer reporting agency that describes a person's credit history, character, medical records, etc. 2) A credit report must be necessary; there has to be a valid need, such as when the person is applying for credit, insurance, or employment 3) An entity must have a valid need to access a consumer report, such as: -credit application -insurance application -employment application -federal grand jury proceedings -child support case management -licensure from a government entity -bank or credit union take-over by the FDIC or NCUA

Employment Purposes

1) In most cases, employers, or potential employers, must get a person's written consent in order to pull a consumer report on that person 2) If an employer decides to take adverse action against someone (such as firing or not hiring him) based on the information in his consumer report, the employer must notify him within 3 business days, unless the information in the report prompts a national security investigation 3) The employer must tell the employee -it took adverse action because of information contained his consumer report -the name, address, and telephone number of reporting agency -the reporting agency was not the one who decided to take adverse action against him, and cannot explain why the employer took such action -he has a right to request a copy of his consumer report and dispute any incorrect or missing information with the reporting agency

Other Approved Reasons for Requesting a Consumer Report

1) In response to a court order or subpoena in connection with proceedings before a federal grand jury 2) When requested by the head of a state or local child support enforcement agency, if needed to appropriately set or enforce a valid child support order, as long as the report is kept confidential and only used for this purpose 3) By a government entity, when required by law to verify an applicant's financial responsibility in order to determine his eligibility for a license or other benefit (such as an adjuster license) 4) By the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) as part of its preparation to take control of, or liquidate, an insured bank or credit union

Medical Info on Consumer Report

1) Must not disclose to a third party the medical provider or the nature of medical products or services provided 2) The information must be encoded in such a way that is does not identify the provider, nature of services, products, or devices to anyone except the consumer himself 3) Can only be included if pertinent to the purpose for which the report is pulled 4) Can only be included with the consumer's permission 5) It is issued in connection with an insurance transaction, with the person's express consent 6) It is issued in connection with a credit or employment application, if: -the information is materially relevant to the case -the person provides written consent 7) The information in the report only pertains to transactions, accounts, or debts related to medical products or services, as long as this information is encoded so that it doesn't identify specific doctors or the nature of their products or services -a creditor may never use someone's medical information (other than transactions, accounts, or debts) to determine his eligibility for credit

Time Limits for Negative Information

1) Outdated Negative Information 2) In most cases, negative info must be removed from file after 7 years -paid tax liens -credit accounts placed in collections or charged off -civil suits, civil judgements, or arrest record (7 years or until the statute of limitations has expired, whichever is longer) -any other adverse items, other than criminal convictions -bankruptcies must be removed after 10 years 3) The reporting agency has to verify its validity within 30 days before issuing the report 4) Consumer report can include older info if being used for -credit or insurance applications for $150,000 or more -underwriting a life insurance policy with a face value of $150,000 or more -employment with salary of $75,000 or more