Skip to main content

Search

Fair Credit Reporting: 3.4.2.2 Credit Monitoring Is Ineffective in Preventing or Redressing Identity Theft

Credit monitoring services are often marketed as a way to prevent identity theft. Yet they are ineffective in detecting certain forms of identity theft, such as when a thief uses the consumer’s Social Security number, but not the consumer’s name, to obtain credit.333 The identity theft insurance products offered with credit monitoring have very low payouts, because they mostly cover out-of-pocket expenses related to restoring the consumer’s identity.334

Fair Credit Reporting: 3.4.2.3 Mandatory Arbitration

Another problem is that, even if free, a consumer who enrolls in a credit monitoring product will be subject to mandatory arbitration provisions,337 a risk which should not exist if the consumer accesses a credit report through the centralized source.338 These arbitration provisions may require arbitration of claims, not only involving the credit monitoring product, but any claims against the CRA including for inaccuracies or failure to reasonably investigate a dispute

Fair Credit Reporting: 3.4.2.4 Enforcement Actions

There have been a number of government enforcement actions over the sale of credit monitoring products. For example, in 2005, the FTC settled an enforcement action alleging that Experian Consumer Direct deceptively marketed free consumer reports by not adequately disclosing that consumers accepting the offer would automatically be signed up for a $79.95 monitoring service, if they did not affirmatively cancel within thirty days.340

Fair Credit Reporting: 3.5.1 Deciding From Which CRA to Seek a Report

In most cases, the consumer’s file at one of the “Big Three” nationwide consumer reporting agencies—Equifax, Experian, and TransUnion—will be of most interest. These are the CRAs that provide most reports used by creditors, insurers, and even employers. Each of the “Big Three” nationwide CRAs has different systems to collect similar data. The actual information collected may be different in some cases, as not all furnishers provide information to each of the “Big Three” nationwide CRAs.

Fair Credit Reporting: 3.5.2.2 Other Reports From the “Big Three” Nationwide Consumer Reporting Agencies

In addition to a free annual report, consumers have a number of other rights to obtain a consumer report from the “Big Three” nationwide CRAs. In general, there will be little difficulty in obtaining a paid report or purchasing one of the many other more expensive products that the nationwide CRAs sell. Going to their websites will provide easy access to all of these paid products. The consumer may have more difficulty obtaining information on how to request a free report other than an annual free report.

Fair Credit Reporting: 3.5.2.3 Obtaining Reports From Specialty CRAs, Smaller CRAs

Consumers cannot request their reports from a nationwide specialty CRA through the centralized source.393 Instead, specialty nationwide CRAs must provide a toll-free number where the consumer can obtain a free annual report.394 Presumably the same number can be used to obtain reports on other bases. Below is the contact information for a number of the specialized CRAs (subject to change; readers are advised to verify these addresses before using).

Fair Credit Reporting: 3.5.3.2 Regulation V Requirements

The FACTA amendments of 2009426 required regulations to be issued defining what constitutes appropriate proof of identity by a consumer for obtaining a consumer report and for fraud alerts.427 In turn, Regulation V requires that CRAs develop and implement reasonable requirements for such proof of identity.428 The information the consumer supplies must be sufficient to enable the CRA to match the consumer with its files and to make sure the consumer

Fair Credit Reporting: 3.5.3.4 Necessity of a Social Security Number

CRAs will routinely ask for the consumer’s Social Security number (SSN) to obtain a consumer report. Regulation V cites this as an example of a potentially reasonable request for information,443 and courts have also held it to be a reasonable requirement.444 However, the reasonableness of such a requirement could also depend on whether such information is necessary for the CRAs to match consumers with their files.445

Fair Credit Reporting: 3.5.4 Ability of a Consumer’s Representative to Receive a Report

The FCRA states that a CRA may furnish a consumer report in accordance with written instructions of the consumer to whom it relates.447 Without such an authorization or a permissible purpose, not even a spouse may obtain a report on a partner. However, the CRA is not required to make a disclosure to a third party based on the consumer’s authorization;448 only a request by the consumer obliges the CRA to provide the report.

Fair Credit Reporting: 3.6.2 Disclosure Must be “Clear and Accurate”

The CRA’s disclosure of the consumer’s file must be made “clearly and accurately.”528 It must be “sufficient to allow the consumer to compare the disclosed information from the credit file against the consumer’s personal information in order to allow the consumer to determine the accuracy of the information . . .”529

Fair Credit Reporting: 3.6.3 Disclosure Does Not Depend on Location of Information

The consumer must be provided with information without regard to where the information is located.544 The CRA must also disclose information it reports on a consumer, even if the information is kept separate from the rest of its database. Otherwise, a CRA could evade the disclosure requirements of the FCRA simply by keeping information in different database.

Fair Credit Reporting: 3.6.4.3.1 Introduction

The CRA must disclose the names of all recipients of consumer reports about the consumer that were furnished within one year prior to the consumer’s request for disclosure.580 Additionally, the consumer must be told the names of any persons who received consumer reports on the consumer for employment purposes within two years before the request.581 The CRA must also disclose the address and telephone number of the recipient, but only if specifically requested by the consumer.

Fair Credit Reporting: 3.6.4.3.2 Exception for FBI counter-intelligence and government security clearance usage

The FCRA grants the Federal Bureau of Investigation secret access, for certain purposes, to information kept by CRAs.598 In these circumstances, CRAs may not reveal to the consumer, or any user, that the FBI obtained any information from the CRA, or even sought to obtain any such information.599 In addition, when the head of a federal agency or department provides a written finding600 that a consumer report will be used for security clearance purpo

Fair Credit Reporting: 3.6.4.4 Identification of Checks Upon Which Adverse Characterizations of the Consumer Are Based

The FCRA clarifies what information must be included in the report concerning consumer check-writing. The report must specify the dates, original payees, and amounts of any checks upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.602 For example, if a CRA has information about a bounced check in the consumer’s file, disclosure of the contents of that file must include the date, payee, and amount of that bounced check.

Fair Credit Reporting: 3.6.5.1 Credit Scores

The FCRA does not require disclosure of the consumer’s credit score as part of the file disclosure.603 Instead, the Act provides a specific separate right to a disclosure of the credit score for a fee.604 A more general discussion of the disclosure of credit scores is found at § 3.3.10, supra,

Fair Credit Reporting: 3.6.5.2 Audit Trail and Other Ancillary Information

An audit trail is internal information that the CRA adds to the file as actions are taken on that file, so that an auditor can later review those actions, to verify that they were proper.605 The FTC staff deems that such information need not be disclosed because the information is not furnished in consumer reports or used as a basis in preparing them.606 This, of course, will not prevent the consumer from seeking audit trail information through discovery if an action is filed in court.

Fair Credit Reporting: 3.6.5.3 Truncation of Consumer’s Social Security Number

Upon the consumer’s request, the CRA must truncate the disclosure of the consumer’s file so that it does not include first five digits of the consumer’s Social Security number (SSN).612 However, the Act does not require the CRA to mask the entire SSN.613 If the consumer does not request truncation of the SSN and the CRA truncates it, there could be a claim for violation of section 1681g(a)’s requirement to disclose all information in the consumer’s file.614

Fair Credit Reporting: 3.7.1 Electronic and Mail Disclosures

Unless otherwise authorized by the consumer, the report provided to the consumer must be in writing.617 The consumer may authorize any other reasonable form of disclosure that is available from the CRA,618 including electronic disclosure.619 Another reasonable means of disclosure would be disclosure by mail.620 Disclosure by fax would seem to be another approach.

Fair Credit Reporting: 3.7.2 In-Person and Telephone Disclosures

The consumer can specify disclosure by telephone, but must make a written request for such disclosure.628 (Note that Regulation V makes clear that a consumer can make a telephonic request for a written disclosure.629 Information on how to order a free annual disclosure by telephonic request is listed in

Fair Credit Reporting: 3.7.3 CRAs Must Provide Assistance to Help Consumers Understand the Report

The FCRA requires all CRAs to provide trained personnel to assist consumers in explaining consumer disclosures.633 CRA employees must be trained to provide a full account of all information that the consumer is entitled to receive, and to explain all items that are disclosed.634 The CRA’s employees must be prepared to make thorough and efficient disclosures and to answer questions concerning the items disclosed.

Fair Credit Reporting: 3.7.4 Nationwide CRAs Must Provide Toll-Free Number with Accessible Personnel

Nationwide CRAs must provide a toll-free telephone number at which personnel are accessible to consumers during normal business hours.643 This toll-free number must be included in the FTC Summary of Rights that the CRAs must provide with any file disclosures to consumers.644 The requirement imposed on nationwide CRAs to provide a toll-free number with accessible personnel is separate from the requirement imposed on all CRAs to provide trained personnel to assist consumers in explaining consumer