Skip to main content

Search

Fair Credit Reporting: 2.7.10 Accident Reporting Bureaus and Compilers of Insurance Claim Lists

Compiling a listing of policyholders who have received automobile claim payments in the past renders the compiler a CRA.766 Accident bureaus that sell motor vehicle operating records to insurance companies may be CRAs,767 but police or sheriff’s departments that prepare accident reports are not.768 State motor vehicle departments are not CRAs either, when selling information to private parties or when cooperating with other government agencies.

Fair Credit Reporting: 2.7.12 Retailer Database Services

There are a number of database services geared toward retailers, most of which focus on fraud prevention. Many of these database services have an online presence. In response to the growing e-commerce market, companies such as CyberSource have started collecting and analyzing data from web merchants and profiling consumers, based on their purchase transactions, for such characteristics as potential for fraud.

Fair Credit Reporting: 2.7.13 Internet, Mobile, and Reward Program Data Mining and Marketing Companies

With the blizzard of information now collected on consumers when they use the Internet, mobile devices (for example, smartphones and tablets), and reward programs, new forms of reports and scores are being developed to evaluate consumers for a variety of purposes. Operating entirely outside of public view, computer algorithms analyzing this consumer information can estimate a consumer’s likely spending or value as a customer and determine whether the consumer gets an offer, what price the consumer pays, and how the consumer is treated. As commentators have described:

Fair Credit Reporting: 2.4.1 Overview

The FCRA statutorily excludes a number of reports from coverage under the FCRA, which otherwise would meet the definition of consumer report. These include first-hand experience information, information shared by affiliated companies, certain reports by employment agencies, and a credit card issuer’s communication to a merchant of approval of a transaction. When determining FCRA coverage, these statutory exemptions must be considered.

Fair Credit Reporting: 2.5.1 Overview

Most FCRA provisions require both a consumer report and a consumer reporting agency (CRA). The two elements are interdependent because the definition of consumer report refers to consumer reporting agencies and vice versa. Thus, for a transaction to be covered by the FCRA there must usually not only be a consumer report, but also a consumer reporting agency.

The FCRA defines “consumer reporting agency” as:

Fair Credit Reporting: 2.6.1.1 Generally

“Nationwide” consumer reporting agencies have a special status under the FCRA to which a few unique obligations attach. (The FCRA does not use the term “nationwide consumer reporting agency”; the phrase used throughout the Act is “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis.”) This subsection discusses the definition of a “nationwide” consumer reporting agency (CRA) and identifies their unique obligations.

Fair Credit Reporting: 2.7.1 Credit Bureaus, Inspection Bureaus, and Consumer Reporting Agencies Collecting Public Record Data

Classic examples of consumer reporting agencies are the three major credit bureaus: Experian, TransUnion, and Equifax.687 Note that while Equifax Information Services, L.L.C. is a CRA, some courts have held that Equifax Inc. is not.688 However, other courts have declined to dismiss FCRA claims on the grounds that Equifax, Inc. is not a CRA, often stressing that the CRA status of Equifax, Inc. should be resolved at the summary judgment stage.689

Fair Credit Reporting: 2.6.2.1 Generally

The FCRA includes a category of CRA called a “nationwide specialty consumer reporting agency.”642 These CRAs are defined as “consumer reporting agencies that compile and maintain files on a nationwide basis relating to consumers’ medical records or payments, residential or tenant histories, check-writing histories, employment histories, or insurance claims.”643

Fair Credit Reporting: 2.6.3.1 Generally

Resellers act as information brokers, buying large volumes of consumer reports at discount rates from other CRAs and reselling the data to lower volume buyers. Banks and mortgage companies sometimes use resellers to procure reports from at least two of the “Big Three” nationwide CRAs, combine the information into a single report, and compute a credit score.

Fair Credit Reporting: 2.1.1 Definitions Analyzed in This Chapter

The FCRA regulates primarily “consumer reporting agencies” (CRAs) and “consumer reports.” This chapter will address the scope of both of these terms as well as how the FCRA governs transactions involving either of them. Furthermore, since FCRA rights generally apply only to consumers, this chapter will also analyze the Act’s definition of “consumer.”

Simply put, the Act defines a “CRA” as an entity that furnishes consumer reports and defines “consumer reports” as information communicated by a CRA. Clearly, these two terms are interdependent.

Fair Credit Reporting: 2.3.5.1 Generally

The FCRA provides that consumer reports involve information “used or expected to be used or collected in whole or in part for” various listed purposes.152 That is, if a CRA expects a user to use a report for a listed purpose or if the CRA collected the information in the report for a listed purpose, the report is a consumer report, even if the user applies the report to a different purpose.153 The consumer need only show that a report meets one of these criteria: that the report was “us

Fair Credit Reporting: 2.3.6.1 Generally

To be a consumer report under section 1681a, information must be collected, used, or expected to be used at least in part for the purpose of serving as a factor in establishing the consumer’s eligibility for: “(A) credit or insurance to be used primarily for personal, family or household purposes; (B) employment purposes; or (C) other purposes authorized under section 1681b” of the FCRA.191

Fair Credit Reporting: 2.3.3.3 Reports on Businesses Are Generally Not Consumer Reports

Because “consumer” is defined as an individual, a consumer report must bear on an individual’s characteristics, not the characteristics of a business or another artificial entity.66 Reports about corporations, associations, partnerships, or other entities are not consumer reports, because the report is not about a consumer.67 A report on an individual’s business history (as opposed to personal credit or employment history) is also not a consumer report if it was collected, used, and

Fair Credit Reporting: 2.3.6.2 Reports on Individuals When Used for Business Purposes

As discussed above, a report solely on a business entity is not a consumer report.196 A report on a consumer’s business history (as opposed to personal credit or employment history) is also not a consumer report if it was collected, used, and expected to be used to evaluate business credit or insurance eligibility or to collect a commercial debt.197 This is consistent with the legislative history that the FCRA was not intended to cover business credit or business insurance repo

Fair Credit Reporting: 2.2 FCRA Applies to “Consumers”

The FCRA applies to “consumers,” which the Act defines as “an individual.”11 The definition only includes natural persons, not artificial entities such as partnerships, corporations, trusts, estates, cooperatives, associations, governments, government subdivisions, or agencies.12 Even a nonprofit community organization is not a consumer.

Fair Credit Reporting: 2.3.1.1 Generally

The FCRA defines a “consumer report” as:18

[A]ny written, oral, or other communication of any information by a CRA bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for—

Fair Credit Reporting: 2.6.1.4 Whether Companies Providing Credit Monitoring Services Are CRAs

The nationwide consumer reporting companies, as well as other companies, offer “credit monitoring” services to consumers as a means to protect and improve their credit.627 The actual companies that offer these services are subsidiaries or affiliates of the nationwide CRAs, which raises the question of whether the FCRA covers the subsidiaries or affiliates as CRAs and, as a result, whether the reports are “consumer reports” or “file disclosures” under the FCRA.628 This is an important issue, beca

Fair Credit Reporting: 2.3.3.2 Coded Lists

The 1990 FTC Official Staff Commentary had stated that a report coded by, for example, Social Security number, driver’s license number, or bank account number, which did not disclose a consumer’s identity until decoded, was not a consumer report.63 The FTC Official Staff Commentary was rescinded in July 2011, and the FTC issued a Staff Summary in its place.64 Citing advancements in technology and the public availability of a broad range of data about consumers, the FTC clarifies in the 2011 Staff Su

Fair Credit Reporting: 2.3.6.8 Legitimate Business Need for Information

One of the potentially broadest types of information incorporated into the definition of consumer report is information for which a person “otherwise has a legitimate business need” in one of two situations: “(i) in connection with a business transaction that is initiated by the consumer; or (ii) to review an account to determine whether the consumer continues to meet the terms of the account.”314

Fair Credit Reporting: 2.3.6.3.2 Check writing, check approval, and similar lists

Reports or lists supplied to merchants, lenders, landlords, and banks on consumers’ check writing history or other factors reflecting creditworthiness are generally considered to be consumer reports. Two approaches have been taken in examining whether reports issued to banks by check guarantee companies are consumer reports under the FCRA.

Fair Credit Reporting: 2.3.6.3.3 Tenant screening reports

Tenant screening reports compiled by tenant screening companies are consumer reports under the Act.249 Tenant screening companies that are consumer reporting agencies include CoreLogic Rental Property Solutions, RealPage LeasingDesk, On-Site (which has been acquired by RealPage), AppFolio, RentGrow, TransUnion Rental Screening Solutions, and Experian RentBureau.250