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Fair Credit Reporting: 2.4.4.2.2 Investigative report

The first criterion for the employment agency exclusion is that the report would otherwise have qualified as an investigative report.418 Investigative consumer reports are any consumer reports that contain information on the consumer’s character or reputation or similar personal information, obtained through personal interviews with neighbors, friends, or associates.419 Employment agencies, recruiting for an employer or seeking to place an individual in a job, commonly interview a potential empl

Fair Credit Reporting: 2.4.4.2.3 Made for purposes of employment procurement

The second criterion for the employment agency exclusion is that the communication be made to a prospective employer either for the purpose of procuring an employee for the employer or for the purpose of procuring an opportunity for a consumer to work for the employer.420 In addition, the communication may not be used by any person for any other purpose.421

Fair Credit Reporting: 2.4.4.2.4 Regularly performs employment procurement services

The third criterion is that the person making the communication must be a person who regularly performs employment procurement services.422 The effect of this criterion is to limit the exclusion to employment agencies, but the agency does not need to be incorporated or a partnership. Any person who regularly performs employment procurement services may qualify for the exclusion.

Fair Credit Reporting: 2.4.4.2.5 Consumer consent and required disclosures

The final criterion is that the consumer must consent to the employment agency communication and the agency must make certain disclosures to the consumer.423 The consumer’s consent may be oral or in writing.424 If the consent is oral, then the employment agency must confirm it in writing within three business days.425 The consumer must consent to the nature and scope of the communication, before information is collected for that purpose.

Fair Credit Reporting: 2.5.6 Exception for Joint Lenders and Users

The 1990 FTC Official Staff Commentary had adopted an exception to the definition of CRA, not present in the statutory text, for “joint lenders” or “joint users” of the report.562 The Staff Commentary was rescinded in July 2011, and the FTC issued a Staff Summary in its place.563 In the 2011 Staff Summary, the FTC rejected use of such terms, noting that as “consumer transactions have developed more complexity and often involve more intermediaries, the ‘joint user’ concept became more strained ev

Fair Credit Reporting: 2.5.3.1 “Regularly Engages”

Entities are not CRAs unless they “regularly engage” in consumer reporting activities.465 The FTC Staff Summary provides little guidance as to when a person “regularly engages.” It only indicates that an isolated transaction in which a business furnishes information about a customer or employee in response to a single inquiry would not be “regularly” making consumer reports.466

Fair Credit Reporting: 2.5.4.1 Generally

Even if an entity assembles or evaluates consumer information, the entity is a CRA only if it does so “for the purpose of” furnishing consumer reports to third parties.”518 Both the Second Circuit and the Ninth Circuit have held that, in order to qualify as a “consumer reporting agency,” an entity must have a specific intent to furnish a “consumer report.”519

Fair Credit Reporting: 2.7.2 Creditors As Consumer Reporting Agencies

Creditors frequently exchange credit information about consumers with other creditors, CRAs, retailers, brokers, and other parties. As such, creditors may be CRAs. Nevertheless, the FCRA contains numerous exceptions to limit the extent to which a creditor is treated as a CRA.

Fair Credit Reporting: 2.7.3 Specialty CRAs

Other types of CRAs include companies that assist landlords in screening prospective tenants,705 that collect medical information for the purpose of insurance underwriting,706 or that guarantee consumers’ checks.707 These CRAs may also fit the definition of a “nationwide” specialty CRA.708

Fair Credit Reporting: 2.5.4.2 Purposes That Do Not Make an Entity a Consumer Reporting Agency

The 2011 FTC Staff Summary outlines several purposes that do not turn the provider into a consumer reporting agency. A creditor is not a CRA if it transmits information to a service provider (i) solely for the purpose of servicing the consumer’s account and (ii) under circumstances that permit only that use.521 In such circumstances, the creditor’s purpose is to enable the provider to carry out a function on behalf of the creditor.

Fair Credit Reporting: 2.5.4.3 Evasion of Purpose Requirement

An entity that is providing information to third parties and that otherwise meets the definition of consumer report may attempt to evade the definition of consumer reporting agency by claiming that the information is not assembled for the purpose of furnishing consumer reports.

Fair Credit Reporting: 2.6.3.3 Duties of Resellers

The FCRA exempts resellers from certain responsibilities and imposes modified responsibilities in other situations. With the exceptions of these exemptions and modifications, which are discussed below, resellers are subject to all of the general requirements imposed on CRAs by the FCRA.665

Fair Credit Reporting: 2.6.4 Trucker Database Services

The interstate trucking industry relies heavily on DAC Trucking Solutions, a product of HireRight, to gather and disseminate truck driver employment histories and driving records to affiliated motor carriers.684 Trucker database services such as DAC are clearly CRAs; however, employers who use these services may follow less stringent notice requirements for these reports than other users of employment reports.685

Fair Credit Reporting: 2.7.6 Data Brokers

Data brokers are companies that have developed highly sophisticated databases of consumer information, which may or may not be governed by the FCRA, the Gramm-Leach-Bliley Act, or other laws and regulations intended to protect consumer data.731 Data brokers typically provide information services to a variety of businesses and government entities, sometimes to detect fraudulent transactions or to assist in locating individuals.732

Fair Credit Reporting: 2.7.7 Data Aggregators

Data aggregators provide access, usually with consumer consent,748 to a consumer’s bank, credit card, or other types of account data from one or more institutions. Data aggregators are typically middlemen that allow another entity, often one offering a mobile app, to use that data to offer the consumer a service. Data aggregators include Finicity, MX, Plaid, and Yodlee (which has been acquired by Envestnet).

Fair Credit Reporting: 2.7.8 Detective, Employment Agencies, and Employers

An employment agency that gathers information about consumers and reports the information to prospective employers will often be a CRA under the FCRA. For example, an employment agency that prepares lists containing names of employees fired for cause is a CRA.752 However, many communications by employment agencies that would otherwise be considered consumer reports are excluded from the definition of a consumer report.753

Fair Credit Reporting: 2.7.9 Attorneys

Several FTC staff opinions have discussed situations in which attorneys may be CRAs. However, courts are often loathe to regulate attorneys under the FCRA, so these opinions should be used with care.