FCRA REQUIREMENTS

Must read and sign: FCRA Guidelines:

In compliance with the Fair Reporting Act (FCRA), requires that this notice be provided to inform users of consumer reports of their legal obligations. State law may impose additional requirements. The text of the FCRA can be obtained at the Federal Trade Commission’s website:www.ftc.gov/credit. At the end of this document is a list of United States Code citations for the FCRA. Other information about users duties is also available at the Commission’s website Users must consult the relevant provisions of the FCRA for details about their obligations under the FCRA.
1. End Users obligations of consumer reports:
A. Users must have a Permissible Purpose:
  • All users must have a permissible purpose under the FCRA to obtain a Consumer Report. Section 604 contains a list of the permissible purposes under the law. These are:
  • As instructed by the consumer in writing. Sec 604(a)2
  • For the extension of credit as a result of an application from a consumer, or the review or collection of a consumer’s account. Sec 604(a)3(a)
  • As ordered by a court or a federal grand jury subpoena. Sec 604(a)1
  • For employment purposes, including hiring and promotion decisions, where the consumer has given written permission. Sec. 604(a)3(b)and 604(b)
  • When there is a legitimate business need, in connection with a business transaction that is initiated by the consumer. Sec 604(a)3(f)(i)
  • For use by a potential investor or services, or current insurer, in a valuation or assessment of the credit or prepayment risks associated with an existing credit obligation. Sec 604(a)3(e)
  • For use by state and local officials in connection with the determination of child support payments, and or modification and enforcement thereof. Sec 604(a)4 and 604(a)5.
In addition, creditors and insurers may obtain certain consumer report information for the purpose of making prescreened unsolicited offers of credit or insurance. Sec 604c. The particular obligations of users of prescreened information are described in sec VII below.
B. Users Must Provide Certifications
Sec. 604(f) prohibits any person from obtaining a consumer report from a consumer reporting agency (CRA) unless the person has certified to the CRA the permissible purpose for which the report is being obtained and certifies that the report will not be used for any other purpose.
C. Users Must Notify Consumers When Adverse Actions Are Taken
The term “adverse action” is defined very broadly by Sec 603. “Adverse Actions” include all business, credit, and employment actions affecting consumer that can be considered to have a negative impact as defined by Sec. 603(k) of the FCRA- such as denying or canceling credit or insurance, or denying employment or promotion. No adverse action occurs in a credit transaction where the creditor makes a counteroffer that is accepted by the consumer.
1. Adverse Actions Based on Information Obtained From a CRA
If a user takes any type of adverse action as defined by the FCRA that is based at least in part on information contained in a consumer report, Sec 615(a) requires the user to notify the consumer. The notification may be done in writing, orally, or by electronic means. It must include the following:
  • The name, address, and telephone number of the CRA (including a toll-free number, if it is a nationwide CRA) that provided the report.
  • A statement that the CRA did not make the adverse decision and is not able to explain why the decision was made.
  • A statement setting forth the consumer’s right to obtain a free disclosure of the consumer’s file from the CRA if the consumer makes a request within 60 days.
  • A statement setting forth the consumer’s right to dispute with the CRA the accuracy or completeness of any information provided by the CRA.
2. Adverse Actions Based on Information Obtained From Third Parties Who Are Not Consumer Reporting Agencies.

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