Fair Credit Reporting: Section 603(n)
Section 603(n) defines the term “State” to mean any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States.
Section 603(n) defines the term “State” to mean any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States.
Section 603(o) states that certain employment agency communications are exempt from the definition of “consumer report,” where the agency follows prescribed procedures to provide prior notice to, and obtain prior consent from, consumers.
1. EMPLOYMENT AGENCIES
This section exempts from the FCRA communications by employment agencies engaged in procuring (a) jobs for applicants or (b) employees for employers.152
2. EMPLOYMENT SCREENING SERVICES
Section 613(a) provides that a CRA, when it compiles and provides public record information that is likely to have an adverse effect on a consumer’s ability to obtain employment, shall either (1) notify the consumer at the time such information is provided to an employer or potential employer or (2) maintain strict procedures to insure that the information is complete and up to date.
Section 614 provides, “Whenever a consumer reporting agency prepares an investigative consumer report, no adverse information in the consumer report (other than information which is a matter of public record) may be included in a subsequent consumer report unless such adverse information has been verified in the process of making such subsequent consumer report, or the adverse information was received within the three-month period preceding the date the subsequent report is furnished.”
Section 603(r) defines the following credit and debit related terms—card issuer, credit card, debit card, account, electronic fund transfer, credit, and creditor.
Section 603(s) states, “The term ‘Federal banking agency’ has the same meaning as in section 3 of the Federal Deposit Insurance Act” which in turn defines the term to mean the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance Corporation.
Section 603(t) defines “financial institution” as “a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union” or anyone else that holds a transaction account (such as a checking account) belonging to a consumer.
Section 603(u) defines “reseller” as a CRA that (1) assembles and merges information from other consumer reporting agencies for purposes of furnishing such information to third parties; and (2) does not maintain a database of the assembled or merged information.
1. RELATION TO OTHER SECTIONS
Section 603(v) defines “Commission” as the Federal Trade Commission.
Sections 616 and 617 impose liability for willful noncompliance and negligent noncompliance, respectively. The monetary penalties mandated by these two sections include actual damages proven by a consumer or a CRA, plus costs and attorneys fees. In the case of willful violations, the court may also award punitive damages to a consumer.
Section 618 allows civil actions to be brought in any court of competent jurisdiction not later than the earlier of (1) two years after the date of discovery by the plaintiff of the violation or (2) five years after the date on which the violation occurred.
Section 619 provides criminal sanctions against any person who knowingly and willfully obtains information about a consumer from a CRA under false pretenses.
Section 620 provides criminal sanctions against any officer or employee of a CRA who knowingly and willfully provides information concerning an individual from the agency’s file to a person not authorized to receive it.
Section 623(a)(5)(A) provides, “A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action.”
1. RELATION TO OTHER SECTIONS
Section 623(a)(6) requires furnishers to have reasonable procedures to respond to any notification that they receive from a CRA about an identity theft “block,” and to prevent refurnishing such “blocked” information. It also states that after a consumer has submitted an identity theft report “at the address specified by (the furnisher) for receiving such reports,” the furnisher may not report such information to a CRA unless it “subsequently knows or is informed by the consumer that the information is correct.”
1. RELATION TO OTHER SECTIONS
Section 623(a)(7) requires a “financial institution” that regularly reports negative information to nationwide CRAs to provide one clear and conspicuous written notice of that practice to consumers, no later than 30 days after first reporting such information. After providing the notice, the furnisher may provide further negative information “with respect to the same transaction, extension of credit, account, or customer without providing additional notice to the customer.” The Federal Reserve Board was assigned to provide a brief model form for this purpose.
Section 623(a)(8) allows consumers to directly dispute with furnishers the accuracy of information supplied to CRAs, in accord with rules required to be promulgated by the Commission and Federal financial agencies. (Starting July 21, 2011, the Bureau will assume rulemaking authority under this section.) It requires the furnisher to investigate good faith disputes, considering “all relevant information” submitted by the consumer.
Section 623(b) requires that a furnisher that receives a dispute notice from a CRA must investigate the disputed information, review all relevant information provided by the CRA, and report the results of the investigation to the CRA. If the furnisher finds that the information is incomplete or inaccurate, it must report those results to all nationwide CRAs to which it furnished the information.
Section 626 requires CRAs to provide consumer reports or specific information in their files when a certain supervisory official of the Federal Bureau of Investigation certifies in writing that the report or information “is sought for the conduct of an authorized investigation to protect against international terrorism or clandestine intelligence activities. . . .” It states that the CRA (and its personnel) may not disclose “in any consumer report, that the FBI has sought or obtained” such information or report.
Section 627 provides for CRAs to provide all information in their files “to a government agency authorized to conduct investigations of, or intelligence or counterintelligence activities or analysis related to, international terrorism when presented with a written certification by [a certain supervisory level official of] such government agency that such information is necessary for the agency’s conduct or such investigation, activity or analysis.” It states that the CRA (and its personnel) may not “disclose to any person, or specify in any consumer report, that a government agency has sou
Section 628 directs the Commission and other federal agencies to prescribe regulations “requiring any person that maintains or otherwise possesses consumer information, or any compilation of consumer information, derived from consumer reports for a business purpose to properly dispose of any such information or compilation.”
1. IMPLEMENTING RULES
Section 629 required the Commission to “prescribe regulations to prevent a consumer reporting agency from circumventing or evading treatment” as a nationwide CRA. Starting July 21, 2011, the Bureau will assume rulemaking authority under this section.
1. IMPLEMENTING RULES
The Commission issued rules prohibiting CRAs, including newly-formed firms, from evading treatment as a nationwide CRA (16 CFR 611), as required by the provision. See 69 Fed. Reg. 29061, 29063 (May 20, 2004) and 69 Fed. Reg. 8532, 8533 (Feb. 24, 2004).
| Comment 603(b)-1 | Redundant. |
| Comment 603(c)-1 | Redundant. |
| Comment 603(d)-3C | Staff Summary adopts different analysis, now discussed in 604(a)(3)(A)-5. |
| Comment 603(d)-4B |
| 1. Credit Bureau of Lorain, Inc. et al.371 | 81 F.T.C. 381 (1972) |
| 2. Credit Bureau of Columbus, Inc., et al. | 81 F.T.C. 938 (1972) |
| 3. Credit Bureau of Greater Syracuse, Inc., et al. | 84 F.T.C. |
Data Security Breach Statute: Ala. Code §§ 8-38-1 to 8-38-12.