FCRA

Question 1

What or WHO does FCRA regulate?

Answer 1

Any CRA (Consumer Reporting Agency) that provides “consumer reports”

Big 3 CRA
- Equifax
- Transunion
- Experian

Question 2

What is a consmer report?

Answer 2

any report that speaks to an individuals:
- creditworthiness
- credit standing /capacity
- character/reputation
- personal characteristics/lifestyle

Question 2

What is important about FCRA?

Answer 2

1st federal law to regulate how private business uses personal information
- protects individuals’ financial records

Question 3

What is a CRA?

Answer 3

individual or entity that collects/appraises personal info for the purpose of creating/providing consumer reports to 3rd parties for a fee

Question 4

What is the purpose of a consumer report?

Answer 4

used to determine ELIGIBILITY for credit, insurance, employment or other business purposes

Question 5

What is prescreening?

Answer 5

creditors/lenders may obtain limited CR data for unsoliticited offer

Question 6

To Prescreen, what must an entity do?

Answer 6

• preestablish criteria and maintain criteria for 3 years
• include notice with offer that states:
  —-consumer report used
  —-“prescreen approved”
  —-offer doesn’t guarantee extension of credit
  —-contact CRA to prohibit furture prescreening

Question 7

What is a “users” as defined by FCRA?

Answer 7

user = lender/insurer/employer

Question 8

What is a “furnisher” as defined by FCRA?

Answer 8

furnisher = provider of credit history to CRAs

Question 9

What is the FTC Furnisher Rule?

Answer 9

Furnishers to CRAs must ensure data provided is accurate and complete

Question 10

CR User Requirements

Answer 10

• 3rd party data must be accurate/current/complete
• consumers ust receive notice when adverse action/decision made
• must only be used for permissible purposes
• consumers must have access/opportunity to dispute/amend
• record keeping
• provide certifications to CRA
• secure disposals

Question 11

CR Requirements

Answer 11

• must not report outdated info
  —-account data older than 7 years
  —-bankruptcy data older than 10 years
• provide permissible purpose
• maintain records on disclosure
• provide consumer assistance per FTC rules

Question 12

Who enforces FCRA?

Answer 12

• FTC
• CFPB
• State AG
• Dispute Resolution
• Private Litigation

Question 13

What are the 3 buckets of “purpose”?

Answer 13

• legal
• credit related
• other

Question 14

What are “Legal Purposes”?

Answer 14

• ordered by court or grand jury
• in connection with child support

Question 15

What are “Credit Purposes”?

Answer 15

• determine CREDITWORTHINESS
• assessments of credit risks associated with existing obligations
• legitimate business need in connection with consumer initiated transactions
• comsumer account review
• “prescreening”

Question 16

What are “Other” Purposes?

Answer 16

• instructed by consumer
• employment purposes (consumer must grant written auth/consent)
• underwriting insurance (application for consumer)
• determine license or other benefit eligibility

Question 17

Examples of Adverse Actions

Answer 17

actions that have a negative impact on comsumers
- deny/cancel credit/insurance
- deny employment/promotion

Question 18

How must “Users” Certify?

Answer 18

• must certify to CRAs PERMISSIBLE PURPOSE prior to obtaining CR
• promise that CR report only used for SPECIFIC PURPOSE

Question 19

Adverse Action notification requirements

Answer 19

When adverse action based on CRA, uses must notify consumer orally, in writing and electronically

Notification must include:
- CRA’s name/address/phone
- statement CRA did not make decision/ unable to explain decision
- explaintation of consumer rights (free copy of CR)

must be done within 60 days, consumer has right to dispute

Question 20

Addtional Requirments for Orgs that use CR for employement

Answer 20

Users must:
- provide clear/conspicuous notice
- obtain prior auth to access anytime during employement
- certify useage with CRA

Question 21

What is an Investigative Consumer Report?

Answer 21

Includes details about an individual’s personality, characteristics, reputation and/or lifestyle obtained by the CRA from interviews
- users must disclose reports to consumers

Question 22

Investigative Consumer Report Disclosure Requirements

Answer 22

A consumer may:
- obtain a copy of the report
- request in writing; must be delivered w/in 3 days of request

A user must:
- provide consumer with summary of rights
- provide nature and scope of investigation
- certify to CRA disclosure to consumer was made

Question 23

FCRA and Medical Info

Answer 23

FCRA limits use of medical data
- includes only coded payment info
- does not identify medical provider
- users cannot disclose to others, except to carry out purpose for which data was requested

• if medical data is used- consumer must consent or data must be coded
• if used for employment purposes- consumer must consent and data must be relevant

Question 24

CR does not equal Investigative Consumer Report when....

Answer 24

- employer/agent complies with FCRA - no credit info used - summary of investigation (and if applicable, adverse action) provided to employee