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Fair Credit Reporting Act


									         Fair Credit Reporting Act
• You must be told if information in your file has been used
  against you
• You can find out what is in your file
• You can dispute inaccurate information with the Credit
  Reporting Agency
• Inaccurate information must be corrected or deleted.
   – However, the CRA is not required to remove accurate data from
     your file unless it is outdated (as described below) or cannot be
• You can dispute inaccurate items with the source of the
• Outdated information may not be reported (7 years for
  derogatory information, 10 years for bankruptcy)
• Access to your file is limited
   – Only to people with a need recognized by the FCRA—
     usually to consider an application with a creditor,
     insurer, employer, landlord or other business
• Your consent is required for reports that are
  provided to employers, or reports that contain
  medical information
• You may choose to exclude your name from CRA
  lists for unsolicited credit and insurance offers.
• You may seek damages from violators
Changes to the FCRA made in 2003
• One Call Fraud Alerts (credit bureau called has to alert the other
    – Any consumer can request a fraud alert for 90 days or an extended
      alert for 7 years
        • Alert must be included with a credit report and with the delivery of the credit
        • Users of reports and scores cannot issue new credit line or extension of credit
          or higher credit limit unless call the consumer to verify.
• Trade Line Blocking—block trade lines when consumer provides an
  identity theft report that has been filed with law enforcement
• Business records disclosure—if have police report, ID theft victim
  can get copies of reports from businesses where a thief opened an
  account to help clear their names
• Red Flag Guidelines for new accounts and change of address
• Credit card number truncation on consumer reports
•   Social security number truncation
•   Prohibits sale or collection of ID theft debts
•   Debt collector notice requirement – third party debt collectors
•   Prevention of repollution—creditors must have policies to prevent
    refurnishing information arising from ID theft
•   Annual free credit reports within 15 days of request
•   Reinvestigations—CRA have 45 days to reinvestigate disputed items
    resulting from free credit report request
•   Credit Bureaus must provide credit scores
•   Mortgage lenders must provide credit scores
•   Notification of address discrepancy
•   One-time written notification by financial institution to consumer
    that negative information will be sent to credit bureau
• Disposal of consumer information and records
  containing consumer information
• Medical information in a consumer report must be
  coded to obscure specific health care provider and the
  nature of medical services provided
• Statute of limitations extended—can sue up to two
  years following discovery or five years following date of
  violation, whichever is earlier
• Requires that users of credit reports have a
  “permissible purpose” to obtain them and CRAs should
  maintain security and integrity of consumer files and
  allows consumers to limit certain uses of their reports
• Stronger opt-out for prescreening based on
  credit report information –prescreened offers
  must have phone number to opt out of such
  offers in easy to understand format

• Established a financial literacy education
                     Red Flag Rules
• Delayed several times; most recent delay expired Jan 2011
• Anti-fraud regulation requiring creditors and financial
  institutions to identify, detect and respond to warning signs
  that could indicate ID theft
• Process to detect
   –   Discrepancies in address history
   –   Fraud alerts on credit reports
   –   Suspicious use of SSNs
   –   Inactive accounts that suddenly become active
   –   Credit-freeze notifications
   –   Credit reports with suspicious activity patterns
   –   Notices from ID theft victims or law enforcement
 Red Flag Program Clarification Act
• Effective December 2010
• Specified that the rules would apply to
  institutions that are involved in credit
  transactions as a part of their business; this
  eliminated such entities as health care
  providers, etc. who provide service and then
  are paid later.

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