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Fair Credit Reporting: 9.2.6.1.2 2008 Clarification Act

In response to the slew of truncation lawsuits in the mid-2000s, Congress in 2008 adopted a narrow amendment that shielded merchants from liability under the FCRA’s provision authorizing suits for willful noncompliance.

Fair Credit Reporting: 9.2.6.1.3 Electronic transactions

Merchants have advanced a number of arguments against lawsuits seeking to enforce the truncation provision. One of the most frequent arguments involved Internet-based shopping, seeking to exclude these sales from the truncation provision’s protections. These arguments have had some success.

Fair Credit Reporting: 9.2.6.1.5 Damages in a truncation case

If the plaintiff can establish a concrete injury for purposes of standing, they need not prove actual damages in order to seek statutory damages.249 However, when a claim arising from a failure to comply with the truncation provision seeks actual, rather than statutory, damages, costs for credit monitoring services may not suffice to serve as actual damages.250 Furthermore, one court reasoned that the absence of actual injury suffered by putative class members was a factor that the court could c

Fair Credit Reporting: 9.2.6.1.6 Other issues in a truncation case

Courts have dismissed truncation claims that arose when a merchant mistakenly gave the plaintiff the merchant’s copy of the receipt, which included the expiration date, rather than the customer’s copy.253 One court noted that these allegations could not establish a willful violation of the truncation provision, but at most a negligent violation.254 Indeed, the FTC has opined that the truncation requirement “does not apply to receipts other than those provided to the cardholder, such as those ret

Fair Credit Reporting: 9.2.6.3 Disposal of Consumer Information

Regulations promulgated by the FTC, the Securities and Exchange Commission, and the banking regulators267 require users to properly dispose of the consumer information they acquire through consumer reports.268 These regulations are intended to help prevent the illicit disclosure of consumer financial information.

Fair Credit Reporting: 9.2.7.1 Generally

The FACTA Amendments of 2003 attempted to go beyond the surface problem of identity theft by addressing its underlying cause: the failure of businesses to properly respond to warning signs of identity theft and verify the consumer’s identity. These provisions include requirements to implement programs responding to identity theft “red flags,” address discrepancies, and change of address notices.

Fair Credit Reporting: 9.2.7.2.1 Introduction

The FCRA calls for the FTC, the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), and the banking regulators to issue “red flag” guidelines for use by financial institutions283 and creditors284 regarding identity theft.285 In response, the federal banking agencies and the FTC have issued joint final regulations, which implement not only the red flag guidelines, but also change of address

Fair Credit Reporting: 13.2.4.1 Generally

The Dodd-Frank Act gives the CFPB exclusive enforcement authority, relative to other federal agencies, over a number of defined categories of “covered persons.”23 The definition completely excludes the entities discussed above (insured depository institutions and federal credit unions), but includes any entity which meet one of several other criteria, as described below. Some of these criteria are defined directly in the statute while the details of others are left for regulations promulgated by the CFPB.

Fair Credit Reporting: 13.2.4.2 Mortgage Lenders, Servicers, and Foreclosure Relief Providers

The CFPB has exclusive enforcement authority, relative to other federal agencies, over any person who:

[O]ffers or provides origination, brokerage, or servicing of loans secured by real estate for use by consumers primarily for personal, family, or household purposes, or loan modification or foreclosure relief services in connection with such loans.24

In the context of FCRA enforcement, these institutions are likely to be either furnishers or users.

Fair Credit Reporting: 13.2.4.3 Private Student Lenders

The CFPB has exclusive enforcement authority, relative to other federal agencies, over any person who “offers or provides to a consumer any private education loan, as defined in section 140 of the Truth in Lending Act (15 U.S.C. § 1650), notwithstanding section 1027(a)(2)(A) and subject to section 1027(a)(2)(C).”25 In the context of FCRA enforcement, private student lenders are likely to be either furnishers or users.

Fair Credit Reporting: 13.2.4.4 Payday Lenders

The CFPB has exclusive enforcement authority, relative to other federal agencies, over any person who “offers or provides to a consumer a payday loan.”26 In the context of FCRA enforcement, payday lenders are likely to be either furnishers or users.

Fair Credit Reporting: 13.2.4.5 “Larger Participants” in Consumer Financial Markets, Including CRAs

The CFPB has exclusive enforcement authority, relative to other federal agencies, over any person who “is a larger participant of a market for other consumer financial products or services, as defined by rule.”27 The Dodd-Frank Act required the CFPB to issue a rule defining such “larger participants.”28 The CFPB’s authority over CRAs depends on whether they meet the definition of “larger participant,” which includes the “Big Three” nationwide CRAs

Fair Credit Reporting: Section 604(e)

Section 604(e) requires CRAs to allow consumers to opt out of prescreened offers. CRAs must establish and maintain a toll-free telephone number that a consumer can call to opt out. Nationwide CRAs must establish a joint notification system for processing prescreening opt-outs.

1. RELATION TO OTHER SECTIONS

Fair Credit Reporting: Section 604(f)

Section 604(f) prohibits any person from using or obtaining a consumer report, unless the person obtains the report for a permissible purpose and certifies that it will be used for that permissible purpose.

Fair Credit Reporting: Section 604(g)

Section 604(g) generally prohibits CRAs from furnishing medical information in consumer reports without consumer consent, unless the information being furnished pertains to medical debts, and the information is coded to avoid identifying the provider and nature of the transaction, prohibits creditors from obtaining uncoded medical information for credit purposes, with limited exceptions, requires parties who receive medical information to keep such information confidential, and directs the Federal financial agencies to promulgate rules permitting the transmission of certai

Fair Credit Reporting: Section 605(a)

Section 605(a) generally provides time limits beyond which CRAs cannot include information in consumer reports, subject to exceptions set forth in section 605(b).

1. GENERAL

Fair Credit Reporting: Section 605(a)(1)

Section 605(a)(1) prohibits CRAs from reporting “Cases under title 11 of the United States Code or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.”

1. RELATION TO OTHER SUBSECTIONS

Fair Credit Reporting: Section 605(a)(2)

Section 605(a)(2) prohibits CRAs from reporting “Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.”

1. OPERATIVE DATE