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Fair Credit Reporting: 8.11.5.1 Content and Nature of Notice

When a consumer reporting agency supplies public record information to a user for employment purposes and that information is likely to have an adverse effect on employment, the CRA must comply with at least one of the following two procedures.633 The first option requires the CRA to provide notice to the consumer that the CRA is supplying the public record information to a user.

Fair Credit Reporting: 8.11.5.2 Time and Manner of Notice

The CRA must follow specific requirements whenever the CRA furnishes “items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer’s ability to obtain employment.”640 This section applies not only when the information is likely to have an adverse effect on an individual’s obtaining employment, but also when the information will adversely affect the consumer’s ability to retain employment or obtain promotion.641

Fair Credit Reporting: 8.11.5.3 Enforcement of Right

The failure of a CRA to either maintain strict procedures to ensure the accuracy of public record information or else to provide notice that a report has been provided is subject to the usual private remedies of the FCRA including actual damages, punitive damages, costs, and attorney fees.649

Fair Credit Reporting: 8.12.1.1 Types of Affiliate Sharing

Consumer information that is shared among companies or other entities related by common ownership or affiliated by corporate control may be excluded from the definition of consumer report.650 The FCRA regulates this internal sharing (known as “affiliate” sharing) by requiring users to notify consumers of the intended use and providing them with opportunities to opt out of that sharing.651

Fair Credit Reporting: 8.12.1.2 Relation to the Gramm-Leach-Bliley Act

The FCRA requires only that the consumer be given a one-time notice of the right to opt out of affiliate information sharing. However, the Gramm-Leach-Bliley Act,656 a federal statute concerning the privacy of consumer financial information, requires most financial institutions to provide an annual notice to their customers of their privacy policies and of a consumer’s right to opt out from the sharing of personal information with nonaffiliate third parties.657

Fair Credit Reporting: 8.12.2 Affiliate Sharing Exclusion Notice

The provisions of section 1681a(d)(2)(A)(iii) do not prescribe the manner in which the notice and opt-out right must be communicated and exercised, but they do require that the notice must be clear and conspicuous. However, the opt-out election does not have an expiration date, and thus the consumer’s choice to opt out of affiliate sharing of information appears to be permanent. Contrast this with the right to opt out of affiliate marketing solicitations, which expires and must be renewed every five years.

Fair Credit Reporting: 8.12.3.1 Generally

Section 1681s-3 of the FCRA sets forth the requirements of the notice required for affiliate sharing in relation to marketing material. The notice to the consumer must clearly and conspicuously disclose that the information may be communicated among affiliates and provide the consumer with the right to opt out of such marketing.661

Fair Credit Reporting: 8.12.3.2.1 Introduction

Understanding Regulation V’s affiliate sharing requirements requires understanding how Regulation V defines some prominent terms. Furthermore, while not used in this regulation, it may ease understanding of this somewhat complex set of provisions to think of the entity that originally possessed the consumer’s information as the “donor affiliate,” the entity that will communicate the information to its affiliate. The affiliate that receives the information, and that hopes to use it market to the consumer, may be thought of as the “acquiring affiliate.”

Fair Credit Reporting: 8.12.3.2.3 “Preexisting business relationship”

“Preexisting business relationship” is another important term that Regulation V defines.670 This term turns on the degree of prior contact between the consumer and the entity seeking to use that consumer’s information for marketing purposes (the acquiring affiliate). The term is highly critical, because if a preexisting business relationship exists between the consumer and an acquiring affiliate, the consumer can lose the right to a notice and opportunity to opt out of the use of their information.

Fair Credit Reporting: 8.12.3.2.4 Covered solicitations

Regulation V also defines the meaning of making “a solicitation for marketing purposes,” which would constitute a solicitation covered by the regulation.676 The definition has three elements—a receipt element, a use element, and a provision element:

Fair Credit Reporting: 8.12.3.3.3 Delivery of notice

Regulation V requires delivery of the notice of the right to opt out “so that each consumer can reasonably be expected to receive actual notice.”689 Examples of reasonable delivery include delivering the notice by hand, mailing a copy of the notice to the consumer’s last known mailing address, sending a notice by e-mail (so long as the consumer has agreed to receive electronic disclosures in that manner), and posting the notice on an Internet website at which the consumer obtained a product or service electronically, so long as the consumer i

Fair Credit Reporting: 8.12.3.4 Reasonable Opportunity and Reasonable and Simple Method to Opt Out

As for permitted methods for allowing consumers to opt out, Regulation V envisions a number of forms of communication of the opportunity.694 Regulation V provides for examples of such “a reasonable opportunity” when the notice is mailed, sent by electronic means, provided at the time of an electronic transaction, at the time of an in-person transaction, and through inclusion in a Gramm-Leach-Bliley privacy notice.695 The last option is more complicated.696

Fair Credit Reporting: 8.12.3.6 Exceptions

The general notice requirement of the regulation appears to be fairly broad, but there are a number of expansive exceptions from the requirement to provide the notice and opt-out right to a consumer.718 The most significant exception is a preexisting business relationship, which exempts situations where the acquiring affiliate uses the eligibility information to “make a solicitation for marketing purposes to a consumer with whom [the acquiring affiliate has] a preexisting business relationship.”719

Fair Credit Reporting: 8.12.4 Enforcement of Right

The failure to comply with the affiliate sharing provisions of the FCRA is subject to the usual private remedies of the FCRA including actual damages, punitive damages, costs, and attorney fees.728 To the extent that these requirements overlap with those of the Gramm-Leach-Bliley Act, which has no private right of action,729 violations of these requirements should be remediable under the FCRA.

Fair Credit Reporting: 8.13.1.1 Generally

The Debt Collection Improvement Act amended the Federal Claims Collection Act to authorize federal agencies to disclose debtor information to consumer reporting agencies.731 Information that may be released is limited to the name, address, and Social Security number of the obligor, the amount of the claim, and the CRA involved.732

Fair Credit Reporting: 8.13.2 Notice Related to Use of a Consumer Report for Child Support Purposes No Longer Required

Under the FCRA, two separate provisions permit state and local government officials to obtain consumer reports to help determine an individual’s capacity to make child support payments.742 The first provision applies to child support enforcement in general agencies, which may be state or local.743 The second provision744 applies to the single state agency that administers the federal child support enforcement state plan under Title IV-D of the Soci

Fair Credit Reporting: 8.14.1 Other FCRA Notices

Consumers are entitled to a number of other notices, most of which relate to possibly fraudulent use of credit. Specifically, consumers are entitled to notice when a furnisher receives notice of a change of address from the consumer,748 when fraud blocks are removed from the consumer’s credit file,749 and when accounts that have been inactive for two or more years are reactivated.750 These notices are discussed elsewhere in this treatise.

Fair Credit Reporting: 8.14.2 State Law Requirements

Sometimes state law imposes additional disclosure requirements when information is first gathered or reported.751 For example, Minnesota requires that the consumer receive written disclosure prior to preparation of a report for employment purposes.752 California requires creditors to notify consumers and cosigners when first furnishing negative consumer reports to a CRA.753 New York requires that when a CRA provides a consumer report that contains