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Consumer Arbitration Agreements: 4.3.7.1 Fraud in the Factum

Fraud in the execution of a contract, or “fraud in the factum,” occurs when one party’s misrepresentation of the character or an essential term of the contract induces conduct that appears to be a manifestation of assent.92 It is “the sort of fraud that procures a party’s signature to an instrument without knowledge of its true nature or contents.”93 As the California Supreme Court has explained:

Consumer Arbitration Agreements: 4.3.7.2 Fraud in the Inducement

A different kind of fraud, fraud in the inducement, occurs when a party makes misrepresentations about the benefits or nature of a transaction that induces the other party to assent to the agreement. Unlike fraud in the factum, this fraud does not involve trickery about what the other party is agreeing to, but rather involves trickery about why that party should agree.

Fair Credit Reporting: 5.3.1 Overview

A major FCRA purpose is to prevent reporting of inaccurate information, through implementation of accuracy requirements discussed in another chapter.298 Part of the FCRA scheme to promote accuracy is the dispute and reinvestigation process.299

Fair Credit Reporting: 5.3.2.1 Restrictions on Consumer Reporting Agencies

The FCRA restricts the reporting of information that has been disputed as part of the reinvestigation process. At the end of the reinvestigation period, the CRA must delete disputed information if the information cannot be verified, or corrected or modified in light of the reinvestigation.303 If reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute.304

Fair Credit Reporting: 5.3.4 Limits on Furnishing Information on Disputed Credit Card and Open-End Accounts

The Fair Credit Billing Act (FCBA) regulates creditor activity when a consumer complains of a billing error.321 The FCBA applies to credit card bills and other open-end credit, such as home equity lines of credit.322 A billing error is defined quite broadly to cover a wide variety of consumer complaints.323 The protections of the FCBA apply even if the disputed transaction ultimately turns out to be valid.324

Fair Credit Reporting: 5.3.5 Real Estate Settlement Procedures Act Restrictions

The Real Estate Settlement Procedures Act (RESPA)339 provides certain protections regarding billing errors, disputes, and adverse consumer reports that involve home mortgage payments. These include purchase money mortgages, home improvement loans secured by a residence, home equity loans, and other first and junior loans secured by the consumer’s dwelling.

Fair Credit Reporting: 5.4.2 Consumer Reporting Agencies Required to Obtain Consent to Report Medical Information

The FCRA prohibits consumer reporting agencies from reporting medical information about consumers for employment purposes or in connection with credit or insurance transactions without consumer consent.371 If the use involves employment or credit related purposes, the consent must be in writing, must be specific, and must describe the use for which the CRA will furnish the information.372 The medical information must also be relevant for the employment or credit transaction at issue.

Fair Credit Reporting: 5.4.3 Restrictions on Reporting the Identifying Information of Medical Information Furnishers

The FCRA prohibits CRAs from including in consumer reports the name, address, and telephone number provided by furnishers of medical information.379 An exception is provided if such information is restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer.380 In order to ensure that the CRAs can properly implement this restriction, the FCRA requ

Fair Credit Reporting: 5.4.5.2 Veteran’s Medical Debt

The Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amended the FCRA to provide medical debt credit reporting protections for veterans.420 These protections address the problem of negative information on veterans’ consumer credit reports caused by the Department of Veterans Affairs’ (VA) delays and other failures in making payments to non-VA providers for healthcare services to veterans.421 These delays resulted in medical bills being referred to debt collectors, who th

Fair Credit Reporting: 5.4.6.1 Creditors May Not Discriminate Against Applicants on the Basis of Medical Information

The FCRA restricts creditors from obtaining or using medical information when they make a determination on the eligibility or continued eligibility of a consumer for credit.434 The FCRA defines “medical information” broadly to include any past or present physical or mental condition of the consumer.435 For example, this restriction prohibits a creditor’s use of information about a consumer’s mental illness in determining eligibility for credit.

Fair Credit Reporting: 5.4.6.2 Scope of Prohibition

The prohibition against obtaining or using medical information applies in connection with a determination of a consumer’s “eligibility, or continued eligibility,” for credit.438 This includes the qualification or fitness to receive credit, to continue to receive credit, and the terms on which credit is offered.439 It does not include any determination concerning qualifications for employment, insurance (other than credit insurance), or other non-credit product or service.

Fair Credit Reporting: 5.4.6.3 Medical Financial Information Exception

The major exception to the medical information use prohibition is for “medical financial information.” This exception permits creditors to obtain and use medical information in connection with a determination of the consumer’s eligibility for credit so long as three conditions are met:

Fair Credit Reporting: 5.4.6.4 Special Purpose Credit Assistance and Medical Financing Programs

Regulation V permits the use of medical information to determine a consumer’s qualification for certain loan programs based on medical condition. First, the regulations create a category of special credit or credit-related assistance programs, similar to the special credit purpose programs established under the Equal Credit Opportunity Act.456 Creditors may use medical information to determine eligibility for these special credit assistance programs so long as the programs are:457

Fair Credit Reporting: 5.4.6.5 Other Exceptions

The regulations create a number of other exceptions to the rule against obtaining or using medical information in determining credit eligibility. These exceptions include the following:

Fair Credit Reporting: 5.5 FCRA Restrictions on Information from Personal Interviews

Consumer reports cannot contain information from personal interviews with friends, neighbors, business associates, or other third parties, unless they comply with certain special restrictions. This is because a consumer report that contains any information obtained through an interview (whether in person or over the telephone) qualifies as an investigative consumer report under the FCRA, a special type of consumer report to which additional procedures apply.469

Fair Credit Reporting: 5.6.1 Spouse or Former Spouse

A consumer’s file at a consumer reporting agency should contain only information on that consumer. The term “file” in the FCRA is defined as information “on that consumer.”472 Thus, a CRA must designate a separate file for each spouse. The information in the file can only relate to the consumer’s conduct and credit history, and not to the spouse’s.

Truth in Lending: 7.10.2.1 Description of Authorized Users

In the application for a credit card, the card user can specify other persons who are authorized users. These persons may carry a separate card in their own name, or in the cardholder’s name.1221 This frequently occurs in family situations and with business cards.